Preamble

The House met at half past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

CITY OF BRISTOL (PORTISHEAD DOCKS) BILL [Lords]

SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL [Lords]

Orders for Second Reading read.

To be read a Second time on Tuesday 20 October.

LONDON REGIONAL TRANSPORT (PENALTY FARES) BILL (By Order)

Order for consideration of Lords amendments read.

To be considered on Tuesday 20 October.

GREATER MANCHESTER (LIGHT RAPID TRANSIT SYSTEM) (No. 4) BILL [Lords] (By Order)

LONDON DOCKLANDS RAILWAY (LEWISHAM, Etc.) (No. 2) BILL (By Order)

PRICES'S PATENT CANDLE COMPANY LIMITED BILL [Lords] (By Order)

Orders for Third Reading read.

To be read a Third time on Tuesday 20 October.

RIVER HUMBER (UPPER PYEWIPE OUTFALL) BILL [Lords] (By Order)

As amended, considered.

Queen's consent, on behalf of the Crown, having been signified—

Ordered,
That Standing Order 205 (Notice of Third Reading) be suspended and that the Bill be now read the Third time.—[The Chairman of Ways and Means.]

Read the Third time. and passed.

LLANELLI BOROUGH COUNCIL (RIVER LLIEDI) BILL [Lords] (By Order)

Order for Second Reading read.

Read a Second time, and committed.

Oral Answers to Questions — ENVIRONMENT

Subsidiarity

Mr. Wright: To ask the Secretary of State for the Environment if he will list the areas of environmental policy currently within the responsibility of the Commission of the European Community which it is his policy to seek to return to the responsibility of nation states alone.

The Secretary of State for the Environment (Mr. Michael Howard): As agreed at the Lisbon European Council, the Commission and the Council will be working urgently on the procedures and practical steps necessary to implement the principle of subsidiarity and will report to the next European Council in Edinburgh. We shall he looking closely at environmental policy in the context of this work.

Mr. Wright: Is the Secretary of State aware that the proposals that he has just described are causing great dismay among all environmental organisations which, having seen us finally—under the impact of European directives—get rid of the tag of being the dirty man of Europe which the Government gave to us, are now seeing the Government, under the cloak of subsidiarity, planning to celebrate the British presidency of the Commission by trying to reinstate it?

Mr. Howard: This country is not and never has been the dirty man of Europe. We have frequently and habitually taken the lead in persuading the rest of the Community to adopt high environmental standards and we have at the moment the best record in the Community for implementing European legislation. Subsidiarity does not mean and will not mean any weakening in our resolve to achieve the highest environmental standards.

Sir Teddy Taylor: As article 130R of the Maastricht treaty appears to me, probably wrongly, to cover almost all the activities of my right hon. and learned Friend's Department and to transfer all our independence, will my right hon. and learned Friend assist the House in its educational process by publishing a list in the Library of those functions of his Department which he believes are still its exclusive territory?

Mr. Howard: I shall give the most careful and earnest attention to my hon. Friend's request. I suspect that he will find an analysis that the effect of the Maastricht agreement is rather less fundamental in the respect than appears to him at first sight.

Mrs. Ann Taylor: Who in this country supports the Secretary of State's moves to wreck the EC treaty on drinking and bathing waters? Is the right hon. and learned Gentleman under pressure from the newly privatised water companies, which recently donated so much to Conservative party funds? Having always dragged their feet on environmental protection, the Government have created the situation in which people have to look to Europe for the environmental protection that the Government have failed to deliver.

Mr. Howard: The hon. Lady's capacity for rewriting history is unlimited. Her question is riddled with misapprehensions. The only people who were concerned about subsidiarity and who needed to look to the European Community to protect our environment were those who wanted a Labour Government elected on 9 April. They knew that they could have no hope of improving environmental standards at the hands of a Labour Government. Fortunately, this country was spared that prospect.

Mr. James Hill: Does my right hon. and learned Friend agree that some of the worst pollution ever known is to be found in the vicinity of the M3 and Winchester bypass? That issue touches not only on transport, for which my right hon. and learned Friend does not have a mandate, but the pollution caused by delay in finalising that much sought-after motorway. In wresting other parts of environmental policy away from the Commission, could not my right hon. and learned Friend return motorway policy to our national Government?

Mr. Howard: I fully understand my hon. Friend's concern and those of his constituents, which he consistently seeks so assiduously to represent. We have complied with every relevant aspect of European law in respect of the M3. It was the subject of numerous public inquiries, which took into account to the fullest extent all environmental issues. I entirely sympathise with my hon. Friend's point.

Urban Waste

Ms. Eagle: To ask the Secretary of State for the Environment if he will make a statement on the Government's policy on urban waste management.

The Minister for the Environment and Countryside (Mr. David Maclean): The Government will maintain tough controls on those who produce, handle, treat or dispose of waste, to minimise any detrimental impact on local communities.

Ms. Eagle: More than half the non-fossil fuel offset capacity is used for waste incineration, which has been shown to account for at least one quarter of United Kingdom dioxin emissions. Does the Minister agree that dioxin is an extremely dangerous chemical, whose effects on the human body pass down generations? How can he justify the Government subsidising dioxin production in that way, and the proposal to build an incinerator at Bidston between Wallasey and Birkenhead in the same locality as 100 residential streets?

Mr. Maclean: The proposal to build the incinerator to which the hon. Lady refers may be the subject of a planning appeal to my right hon. and learned Friend the Secretary of State, so I cannot comment on it. Before Her Majesty's inspectorate of pollution consents to any emissions into the atmosphere, it will need to satisfy itself that any and all incinerators, wherever they may be, are safe and that emissions are tightly controlled.

Mr. Marlow: Will my hon. Friend the Minister remind my right hon. and learned Friend the Secretary of State—who is not only a decent chap but a well-known Euro-sceptic and also a lawyer—[HON. MEMBERS: "Even worse."]—that under article 130R of the treaty that will

bring about European union, European institutions will require competence over protecting human health? In future, therefore, such questions will be better answered in Strasbourg than in the House.

Mr. Maclean: My right hon. and learned Friend made it very clear where the Government stand on subsidiarity when he answered the original question, and I have nothing to add.

City Challenge, Deptford

Ms. Ruddock: To ask the Secretary of State for the Environment if he will report on the progress of the city challenge programme in Deptford.

The Minister for Housing and Planning (Sir George Young): Deptford city challenge is now making good progress. Its recent achievements include the launch of the community safety programme on 13 July, and the schools routeways programme yesterday. We will be reviewing its progress with its action plan towards the end of the year.

Ms. Ruddock: I share the Minister's satisfaction with the good start that has been made, especially with regard to training. But does he share the despair that I felt on learning that Siemens Plessey Controls, the flagship private sector partner of Deptford city challenge, has had to issue redundancy notices in respect of two thirds of its staff, including all eight apprentices? What action will he take, along with his right hon. Friend the President of the Board of Trade—who set up the city challenge scheme—to protect existing manufacturing jobs and training in my constituency?

Sir George Young: I am grateful for the kind words about the progress of city challenge with which the hon. Lady began her question. Yesterday, as she knows, I spoke to Dick Liddell, the Siemens Plessey site manager, and I understand that my hon. Friend the Minister for Trade has had a meeting with Mr. Beresford of Siemens. He has agreed to help the company to diversify. I also understand that the parent company has agreed to help the subsidiary in Deptford with some of its problems.
One of the problems that face the hon. Lady's local firm is the high cost of the lease. The freeholder is the London borough of Lewisham. It may be possible for the company to renegotiate the lease, thereby bringing down the overheads and some of the running costs.

Mr. Blunkett: In reaching a decision tomorrow about the winners and losers for the next round of city challenge projects, will the Minister take into account the difficulties that have been experienced in the Deptford programme, as outlined by my hon. Friend the Member for Lewisham, Deptford (Ms. Ruddock)? Does he acknowledge that the urban programme, which the Government have cut by £121 million since the mid-1980s—they have cut it by £14·5 million this year, and a further £50 million has been cut from specific housing projects—should form the basis of any sensible inner city regeneration policy, rather than city challenge schemes? Such schemes inevitably involve many losers as well as winners and they are taking vital moneys from the urban programme. Will the Minister confirm, at the end of the parliamentary session, that the urban programme will not be cut in the next two years, and will he give a guarantee to that effect as he has guaranteed that city challenge will not be cut next year?

Sir George Young: I am slightly surprised that the hon. Gentleman should speak about city challenge in such terms. The response from local authorities—including those under Labour control—has been most encouraging and my colleagues and I have spent many days over the past month listening to submissions from authorities throughout the country.
My own view is that city challenge has unlocked a fresh spirit of enterprise in the inner cities. We are seeing new partnerships between local authorities, the private sector and voluntary organisations, and I consider that a worthwhile extension of our inner-city policies. The hon. Gentleman will have to wait until tomorrow, when my right hon. and learned Friend the Secretary of State will be announcing the round two winners.

Household Waste

Mr. Kirkwood: To ask the Secretary of State for the Environment if he will estimate what proportion of household waste is currently recycled; and if he will make a statement.

Mr. Maclean: We estimate that some 5 per cent. of household waste was recycled in 1990.

Mr. Kirkwood: Is the Minister confident that the Government's target of 25 per cent. of household waste being recycled by the end of the century is on course? Any progress in that direction is welcome, but does the Minister feel that the Department is doing enough to achieve its target? Will he consider specifically the fact that, although £15 million of supplementary credit approvals are available as hypothecated local expenditure in England and Wales, there is no money north of the border for Scottish local authorities to engage in projects? Some useful joint local authority and private schemes north of the border are failing as a result of the lack of finance.

Mr. Maclean: I shall draw the hon. Gentleman's latter point to the attention of my right hon. Friend the Secretary of State for Scotland. As for our target generally, yes I am confident that we shall meet it. We have a very good industrial waste recycling record. In the last few years, we have set a target for household waste recycling and we intend to meet it. I am keen on the recycling credits that we have recently introduced. Any group, from the smallest voluntary charity to the largest company, can participate in recycling. All the goods and materials that they prevent from going into landfill will qualify for 50 per cent. of the actual cost of landfill. That literally is cash for trash. I urge people to grab it with enthusiasm.

Mr. Robert B. Jones: Does my hon. Friend agree that at least as important as the facilities provided by local authorities is the public attitude towards and awareness of recycling? Will he therefore ensure that there is maximum liaison with his right hon. Friend the Secretary of State for Education, to ensure that public awareness starts with the very youngest so that this problem can be conquered once and for all?

Mr. Maclean: I am greatly interested in what my hon. Friend says. I congratulate him on his election to the Chairmanship of the Select Committee and I look forward to hearing the advice of his Committee over the next few years. My hon. Friend is absolutely right on this point. We need to capture public enthusiasm for recycling and let the

market take its course. If enough demand is generated to use recycled materials, industry will fill the gap by doing the collection and the recycling. However, recycling has to be led by the consumers. The market will then follow. We must not try to shove and dictate it from the top.

Mr. A. Cecil Walker: May I encourage the Minister to take up with his opposite number the urgent need for recycling facilities in Northern Ireland?

Mr. Maclean: Yes, I certainly shall. When I was at the Ministry of Agriculture, Fisheries and Food Minister I visited the Province occasionally. I hope that I shall be able to do so in future. The hon. Gentleman has given me a convenient excuse.

Mr. William O'Brien: In view of the targets set in the Government's White Paper "This Common Inheritance", does not the Minister feel that the Government should give a higher profile to waste recycling? The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) referred to the shortage of capital to get schemes off the ground. What he said is mirrored in every local authority. Does not the Minister believe that the Government should provide local authorities with capital to get these schemes going? When do the Government intend to give waste recycling a higher profile?

Mr. Maclean: The hon. Gentleman is obviously not aware of the facts. The Government have given waste recycling a very high profile. We set ourselves a high target in "This Common Inheritance." We have allocated £15 million in supplementary credit approvals for this year. We have launched the recycling credit scheme. By 1 August, all local authorities will have to produce their recycling plans. That, as well as the initiatives we have taken to heighten the importance of recycling, means that we shall meet our target. The hon. Gentleman should not assume that the only way to bring about recycling is to throw money at local councils. I want to capture the tremendous enthusiasm of ordinary people, and among the business community, for waste recycling.

Housing Capital Receipts

Mr. Hain: To ask the Secretary of State for the Environment if he will give figures for the total in local authority housing capital receipt funds for England.

Sir George Young: It is currently estimated that English local authorities held about £0·8 billion of usable capital receipts at the end of March 1992. In addition, authorities are estimated to hold over £5 billion of capital receipts which have been set aside as provision to meet credit liabilities. Housing receipts are not separately identifiable.

Mr. Hain: But the Minister is dodging the issue. Does he have any sympathy at all for the tens of thousands of families who do not have their own homes and who are squeezed into the houses of relatives or friends? In my constituency, and in many others, there are examples of young parents sleeping with their babies on the floors of parlours and living rooms—and in garages, in some cases. Even worse, some young women are being advised to get pregnant in order to get a house. When will the Minister release all these billions of pounds of funds and enable local authorities to build council houses?

Sir George Young: I am not sure whether the hon. Gentleman listened to the first part of my answer. I made it quite clear that £0·8 billion of usable capital receipts were available at the end of March 1992. Last year, local authorities spent only 67 per cent. of the receipts that they were entitled to use. Before the hon. Gentleman develops his case for the use of further receipts that have been set aside, he should make sure that local authorities already spend the receipts that they are entitled to spend.

Sir Anthony Durant: Does my hon. Friend agree with the right hon. and learned Member for Monklands, East (Mr. Smith) who said that the Treasury rules for capital receipts were correct and sensible?

Sir George Young: Yes, indeed. I was only disappointed that that sensible statement by the shadow Chancellor was not swiftly endorsed by the rest of the Opposition Front Bench. We look forward with interest to seeing how the Labour party's economic policies develop with a new leader.

Mr. Madden: Does the Minister remember the promises made by Tory Ministers that when council homes were sold, the money raised would be spent on building new homes? How does he explain that in Bradford 12,000 council homes have been sold, yet not a new council house has been built in the past seven years because of a shortage of cash? Why is he not doing more to release the funds that have been locked up for years to enable people to have the new homes that they desperately need?

Sir George Young: Bradford city council has been spending substantial sums of money on modernising and improving its existing stock. The new provision needed by people in Bradford is, as the hon. Gentleman knows, provided by housing associations, the budget for which is increasing substantially from £1 billion two years ago to £2 billion in two years' time. It is sensible to ask local authorties to concentrate their energy and money on improving their stock and to look to the housing associations, which make the nominations to the local authorities, to provide the new social housing that the country needs.

Mr. Conway: Is it not the case that the sale of council houses and the receipts that come from them are still providing valuable housing stock? Will my hon. Friend confirm that there is no restriction upon local authorities to try to rescind some of their outstanding debts by the use of their capital receipts?

Sir George Young: That is a valid point. The total debt of local authorities is £44 billion a year. Servicing that debt costs each adult in this country £140 a year. There are strong arguments for reducing that debt and the burden on ratepayers.

Mr. Gould: Given that the £6 billion in capital receipts already exists—it does not have to be raised through taxation or borrowing—that there are many local authorities such as mine in Barking and Dagenham that are desperate to spend their money on meeting an urgent housing need and that there is no one in the housing world or construction industry who would not dearly like to see the money released to provide a stimulus to the industry, what common sense explanation can the Minister offer for

the Government's policy? Will he use language that will be understood by the homeless in my constituency and elsewhere?

Sir George Young: For a start, there is the comon sense of the hon. Gentleman's right hon. and learned Friend the Member for Monklands, East (Mr. Smith). The hon. Gentleman must understand that the same money cannot be spent twice. When a local authority uses its receipts to redeem debt and reduce its borrowing, it enables my Department to increase the borrowing of another local authority that does not have those receipts. The same money cannot be spent twice without pushing up taxes or interest rates.

Mr. Jenkin: Does the Minister agree that it is rather sad that councils such as Colchester and Tendring in my constituency do not do more to help themselves by transferring their housing to housing associations and releasing the capital to repay their debt so that they can invest more in housing?

Sir George Young: My hon. Friend is right. He will have read in the manifesto that we remain committed to large-scale voluntary transfer. That is an option which many local authorities have endorsed, hut, sadly, so far no Labour authorities. It offers benefits to tenants when they transfer. It offers benefits to the local authority in terms of debt redemption and it enables the new housing association that is set up to make faster progress because the local authority can plough back part of the receipts from the sales. It is an important part of Conservative housing policy which I wish to see developed over the next few years.

EC Presidency

Mr. Bayley: To ask the Secretary of State for the Environment what are his priorities for the EC presidency.

Mr. Howard: As president of the Environment Council, I intend to pursue three main themes—prompt and energetic follow-up to the Rio Earth summit, the integration of environmental considerations into all areas of Community policy, and proper implementation and enforcement of European environmental legislation throughout the Community. I shall pursue the application of the principle of subsidiarity to Community action. I shall continue to press for the early establishment of the European environment agency, but part of our strategy in Europe is to give a strong lead through domestic action.
I can today announce that the Government have decided to establish a new independent environment agency in England and Wales to bring together in an integrated body all the functions of the National Rivers Authority and Her Majesty's inspectorate of pollution, and the waste regulation functions of local authorities. We shall introduce legislation at the earliest opportunity.

Mr. Bayley: As a first step, will the new and long overdue integrated environmental agency give a cast-iron guarantee, as other EC member states have, that our emissions of carbon dioxide and other greenhouse gases will be cut to the 1990 level by the year 2000, even if the American Government do not agree to do so?

Mr. Howard: The hon. Gentleman is a little behind the times. He needs to take into account the recent


communique agreed at Munich by the Group of Seven countries, inviting other countries to join them in ratifying the climate change convention by the end of 1993. That convention was agreed at Rio, very significantly as a result of the efforts of the United Kingdom, so we can fairly claim to be in the lead on this matter.

Mr. Lidington: Will my right hon. and learned Friend take the opportunity of his presidency to ensure that European directives on the environment are equally implemented and enforced throughout the Community to prevent what sometimes happens at the moment, whereby one or two of our partners make grand promises about what they will do but fail to live up to them in practice?

Mr. Howard: I shall indeed. I entirely agree with my hon. Friend. The one definition of subsidiarity to which I do not subscribe is the one which suggests that individual member states should be entitled to pick and choose whether to implement and enforce legislation which has been agreed at Community level. Where legislation has been agreed, it should be applied consistently across the Community.

Mr. Simon Hughes: The Secretary of State said that two of his priorities are to follow up the Rio summit and to secure the implementation and enforcement of European Community environmental legislation, with the inspectorate and the new agency, which we welcome. Does he accept that, as Rio made abundantly clear, environmentalism and nationalism do not go well together? The logic of what he said, with which the House will agree, is that during its presidency the United Kingdom should ensure not only that other countries comply with environmental legislation but that we do so ourselves and do not, as we did on the first day of this month, put off a court case before the European Court to save embarrassment about our failure to comply with the laws with which we say that we agree?

Mr. Howard: The hon. Gentleman may not be aware that the application to postpone the hearing was a joint application by the United Kingdom and the Commission. As he is so interested in enforcement—I welcome his interest—I would have expected him to give the Government some credit for being the only Government in the Community—with the exception of Portugal, to which most of the legislation does not apply—against which the court has not passed an adverse environmental judgment.

Mr. Rupert Allason: I welcome my right hon. and learned Friend's domestic initiative, but will he turn his attention to another domestic issue—the correspondence between his Department and the Bletchley Park Trust? Would not that site, which is of enormous historic importance and is under threat, be a worthwhile monument to the British presidency of the European Community, and will he at least give an undertaking that he will ensure that there will be no demolition of an area which is of considerable significance to everyone who served this country and those who gave their lives in the second world war?

Mr. Howard: I am sure that all relevant aspects of that site will be taken into account and given full and proper weight in the relevant decision-making process.

Mr. Win Griffiths: I welcome the Secretary of State's announcement about the creation of an environmental

protection agency, which has been long awaited and long supported by my party but which the Government explicitly rejected when we raised it during the passage of the Environmental Protection Act 1990. We are very pleased and hope to get the legislation through in the current Session, but will the Minister state categorically that, irrespective of an American commitment to meet the Rio declaration, we will stabilise our carbon dioxide emissions at the 1990 level by the year 2000?

Mr. Howard: I am grateful to the hon. Gentleman for his welcome for my announcement about the agency. I expect the announcement to be widely welcomed. As for the climate change convention which was agreed at Rio, the United States has declared that it intends to take early action to discharge its obligation under that convention and that it will call a meeting later this year to discuss the matter. Of course we attach great importance to the early ratification of the convention and we shall seek to encourage others to join us in ratifying it at an early date. We shall discharge our obligations under the treaty to the full.

Local Authority Expenditure

Mr. Harry Greenway: To ask the Secretary of State for the Environment how much local councils spend on average for each person in the country.

The Minister for Local Government and Inner Cities (Mr. John Redwood): In each area, local councils are planning to spend on average £2,000 per adult this year in England.

Mr. Greenway: Will my hon. Friend confirm that local government spending is now running at £43 billion per year, which gives the Government a legitimate and vital interest in controlling that expenditure? Is he aware that every citizen of Ealing has a debt of £2,000 around his or her neck left by the last Labour council, which increased rates by 65 per cent. in 1987 and trebled them in three years? Is not that typical of the Labour party in control of local government, and is it not awful?

Mr. Redwood: My hon. Friend makes some powerful points. He is right to say that Labour councils often overspend and over-borrow and leave people up to their necks in debt. Around the country there is an average of more than £1,000 of debt for every adult as a result of borrowing plans, often by Labour authorities. My hon. Friend is right that revenue expenditure is now running at high levels. If one adds capital expenditure, the figure is even bigger, as I said in answer to the main question. Contrary to the opinion expressed by the Opposition, it also shows that there is a great deal of choice and discretion for local authorities in deciding how to spend those huge sums in the interests of local taxpayers.

Mr. Hardy: Is the Minister aware that his answer to his hon. Friend the Member for Ealing, North (Mr. Greenway) was almost contemptibly arrogant and irresponsible? Does he not accept that the overwhelming proportion of local government spending is in pursuit of the statutory obligations and duties placed on local authorities, and that only a very small proportion of local government spending is left to the liberty of the individual


council? Would it not be more responsible for Ministers to persuade their hon. Friends that it is unreasonable to try to suggest that all local government spending is profligate?

Mr. Redwood: My hon. Friend was not suggesting that. There are many fine Conservative-controlled councils spending well and wisely on good services for their local communities, but there are still profligate local authorities, sponsored by the Labour party and, yes, it is necessary for someone to stand up for the taxpayers in those areas. My reply was far from arrogant. I believe in local government and I want it to have choice and discretion, which is why we vote so much money for it to exercise that discretion.

Mr. Butcher: Does my hon. Friend recall that during the changeover period from the rating system to the community charge, many local authorities used the time to increase expenditure faster than the rate of inflation? In the change from the community charge system to the new council tax system, will my hon. Friend use his capping powers combined with an RPI minus X formula to protect ratepayers and charge payers from the kind of chicanery that they endured three years ago?

Mr. Redwood: Fortunately my right hon. and learned Friend has more extensive powers, and I am afraid that we shall have to use them if councils are irresponsible. However, I am hopeful that many councils will not be irresponsible next year and I am glad that there are more Tory councils as a result of recent local elections. That means that we shall have more sensible councils spending at prudent levels and providing their chargepayers and council taxpayers with very good value for money. It is interesting to note that most Tory authorities spend below the permitted levels and come in with much lower taxes than do Labour councils.

Radioactive Waste

Mr. Llew Smith: To ask the Secretary of State for the Environment if he will make a statement on progress made by UK Nirex Ltd. in establishing a storage or disposal route for radioactive waste since 1982.

Mr. Howard: After widespread public consultations, Nirex is concentrating its investigations on an area adjacent to the British Nuclear Fuels site at Sellafield. The company is carrying out detailed geological investigations and is refining its design concept for the facility. I understand that Nirex expects to submit an application for planning permission before the end of 1993.

Mr. Smith: As Nirex has ignored public protests and, in my opinion, has disregarded technical difficulties in its search for a site on which to dump its nuclear waste, would not it be wise for the Government to consider postponing the opening of the thermal oxide reprocessing plant at Sellafield, which has no way of dealing with the waste that is created?

Mr. Howard: No, that raises entirely different issues. All the questions to which the hon. Gentleman has referred will, of course, be considered with great care at any planning inquiry following the planning application that Nirex is expected to submit.

Bathing Water Directive

Mr. Hanson: To ask the Secretary of State for the Environment if he will make a statement about compliance with the EC bathing water directive.

Mr. Maclean: Compliance has improved from 51 per cent. in 1986 to 76 per cent. last year. A £2 billion programme of improvements is under way to bring virtually all identified bathing waters up to standard by 1995.

Mr. Hanson: With respect, is not the Minister being rather complacent? Can he confirm that the Government pressured the European Commission into postponing the hearing about British beaches, which would have coincided with the commencement of the British presidency of the Commission? Was not that simply because the Government wished to avoid the embarrassment of occupying the Commision presidency while avoiding the Commission's directives on bathing waters?

Mr. Maclean: It is the hon. Gentleman who is avoiding the point. However, he cannot avoid the fact that we have a £2,000 million investment programme which will bring most of our beaches up to standard by 1995. The Commission has accepted that it would not be possible to accelerate that enormous programme further. The Opposition must make up their minds what they want. Do they wish to compain about the speed with which the progamme is being implemented or about the size of water bills? We are paying through our water bills, but most people want their beaches to be cleaned up—and rightly so.

Mr. Harris: Does my hon. Friend accept that while that programme is not just desirable but essential, it is putting impossible burdens on the consumers of some water companies, particularly those of South West Water? Is he aware that, with colleagues from Cornwall and Devon, I had meetings today with the chairman and officers of South West Water, who are very concerned indeed about the financial impact of this capital programme and even more worried about what other measures will be imposed on water companies, not least by the National Rivers Authority, adding to the burden on hard-pressed consumers?

Mr. Maclean: I have considerable sympathy with the points that my hon. Friend makes. In his latter question, he pointed up the trap into which some Opposition Members fall—the trap of automatically calling for ever tougher standards which might not be necessary in every circumstance. We have a huge investment programme, which in the case of the south-west has resulted in some large increases in water bills. However, the south-west is not unique; there are other parts of the country with particular problems, such as those associated with getting rid of nitrates in water and the £4,000 million programme to clean up the Mersey basin. I know that the Director-General of Water Services, Ian Byatt, will be looking at the K factor in his next review. Only through that mechanism may he be able to assist the south-west.

Mrs. Ann Taylor: If the Government are so proud of their record, why—having been in power for 13 years—are they in breach of the directives so often? Is the Minister aware of suggestions being made in Brussels that the environment directorate, DG11, should be restructured


and perhaps denied the opportunity to take legal action against member states? Will the Minister say clearly whether he supports continuation of the powers of DG11 to take legal action against member states when such action is in the interests of environmental protection throughout Europe?

Mr. Maclean: I will not take lessons from the hon. Lady as her party slashed expenditure on our water industry when it was last in power and seems to gloat at every opportunity when Britain is subject to legal proceedings. Labour Members automatically make the assumption that Britain must be wrong. It is about time they stood up for Britain on occasions.
I am not prepared to comment on rumours that the hon. Lady may care to quote about what may be happening in DG11. It is clear that we want to clean up our beaches. Even without the directive, we would want to make substantial progress in cleaning up our beaches and improving our water supply. The British Government will continue to do that, irrespective of pressure from whatever source.

Mr. Knapman: As our private water companies have access to private capital, we shall comply with the directive, but what evidence does my hon. Friend have that our EC partners are making any real efforts to comply?

Mr. Maclean: My hon. Friend makes a valid point. That is why we have continually stressed that it is vital that enforcement of whatever EC directives are agreed is carried out at European level. One of our priorities in our presidency will be to insist that enforcement is even throughout the EC. We shall seek to introduce measures to that effect. We should like to see an inspectorate of inspectorates to carry out that task. Certainly, we do not want any diminution of enforcement or repatriation of enforcement to national authorities.

Sites of Special Scientific Interest

Mr. Kevin Hughes: To ask the Secretary of State for the Environment what is the latest information he has available about damage to sites of special scientific interest.

Mr. Olner: To ask the Secretary of State for the Environment what is the latest information he has available about damage to sites of special scientific interest.

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): The latest available information on damage to SSSIs is contained in the final report of the former Nature Conservancy Council, a copy of which is in the Library. In the period 1 April 1990 to 31 March 1991, of the 3,536 SSSIs in England notified under the 1981 Act, 149 suffered some damage, and of that number 22 suffered damage from which the site could not recover in the short term.

Mr. Hughes: Despite what the Minister has just said, damage appears to be continuing at an alarming rate on sites of special scientific interest. That is borne out in a recent report by Wildlife Link. When will the Minister and the Government cut out the political rhetoric and gesturing and do something positive to protect SSSIs, such

as making resources available so that local authorities can revoke planning permission and put a stop to peat extraction on SSSIs?

Mr. Baldry: We have a rich tapestry of protection for the countryside. The SSSI system is designed to identify land of scientific interest and provide a means of protecting such sites. Where we have seen any weakness in that protection, we have taken measures to strengthen it by legislation such as the Wildlife and Countryside (Amendment) Act 1991 and also by the removal of permitted development rights in respect of temporary uses of land. Later this year we shall produce planning policy guidance notes on nature conservation. All those measures are intended to enhance the SSSI protection system.

Mr. Olner: Is the Minister aware of a site in my constituency called Ensors pool which is in great danger of being filled and used as a receptor for waste? Will he make a decision? Will he take note of what English Nature says in calling for the site to be classified as an SSSI? Will he ensure that the site is fully protected so that residents in my constituency can enjoy that part of the countryside which should be rightfully theirs? Will the Minister make a statement on that?

Mr. Baldry: The notification of a site as an SSSI signals to the planning authorities the wildlife importance of the site. That is a material factor to be taken into account when considering any planning application that might affect the site. I am sure that that is what will happen with the site to which the hon. Gentleman draws attention.

Mr. Ian Bruce: Does my hon. Friend agree that we must not be too inflexible about the use of SSSIs? Having alerted the Secretary of State to the problems of an area within an SSSI, it is more sensible to ensure that if a new road scheme or development is to affect a site, the flora and fauna from it will be protected in a different area. In south Dorset most SSSIs are on the sites of abandoned quarries.

Mr. Baldry: The SSSI system is there to identify and protect land of scientific interest and was set up by the Wildlife and Countryside Act 1981. It is a framework which works extremely well. Of course we keep the system continuously under review. Owners and occupiers of land must be consulted prior to the designation of any SSSI and that provides a good balance.

Sir Anthony Grant: Will my hon. Friend consider carefully Brampton wood, which is in the constituency of our right hon. Friend the Prime Minister but is also enjoyed by my constituents? It contains sites of special scientific interest and is being sold by the Ministry of Defence. Will my hon. Friend have discussions with Ministers in that Department to ensure that the amenities of my constituents and those of the Prime Minister are duly protected?

Mr. Baldry: My hon. Friend can be assured that any SSSI, in whichever constituency it lies, will be given proper protection.

Poll Tax

Mr. Canavan: To ask the Secretary of State for the Environment what has been the cost to date of introducing, administering and collecting the poll tax, including the cost of Government-initiated relief schemes, broken down by year.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robin Squire): The cost of preparing for the community charge was about £270 million. The cost of administering and collecting the community charge each year has been about £500 million, or between £12 and £15 per charge payer. Relief schemes do not add to overall public expenditure. However, they have ensured that the burden of local taxation has been reduced to 15 per cent. of local government spending.

Mr. Canavan: Will the Minister tell us the whole truth and admit that the Government had squandered more than £14 billion on the poll tax before eventually being forced to admit that it was all a terrible mistake? Does the Minister realise that if local government representatives were guilty of such irresponsible waste of public money they would undoubtedly be surcharged and banned from office for many years? Why not surcharge and ban from office all those Ministers who were responsible for the poll tax?

Mr. Squire: The hon. Member makes a bogus and entirely false point. He has become something of a phaneromaniac when it comes to the poll tax. You will know, Madam Speaker, that that is someone who has a compulsion to keep picking at something and returning to it. If one leaves it alone, it sometimes gets better—and something better is coming in: it is called the council tax. Above all, the hon. Gentleman is not best placed to ask questions about the costs of administering the poll tax, given his early appearance as a poll tax rebel, which would have encouraged thousands of others to push up the cost of collecting that tax.

Mr. Riddick: Does my hon. Friend agree that many of my constituents and many people in this country are thankful to the Government for introducing the relief schemes that have helped to reduce poll tax bills? Were not those relief schemes introduced as a direct response to the incompetence and profligacy of Labour councils throughout the nation?

Mr. Squire: My hon. Friend is entirely right on both points.

Carbon Dioxide Emissions

Mrs. Roche: To ask the Secretary of State for the Environment if he will make a statement about the levels of reduction of carbon dioxide emissions he expects to achieve under current policies.

Mr. Maclean: I refer the hon. Member to the copy of the "Report on UK National Programme for Limiting Carbon Dioxide Emissions", placed in the Library on 15 May, in answer to a question from my hon. Friend the Member for Birmingham, Hall Green (Mr. Hargreaves).

Mrs. Roche: On two separate occasions this afternoon, the Government have been given the opportunity to answer this question clearly, but each time they have

refused to do so. Will the Government stabilise emissions by the year 2000, regardless of what other countries do—yes or no?

Mr. Maclean: We have made our position clear. We made it clear at Rio, we made it clear in the European Community, and only last week we made it clear in the Munich communiqué. I have nothing to add to that.

Rural Housing

Mr. Nigel Evans: To ask the Secretary of State for the Environment what assistance is available to local authorities to tackle housing needs in rural areas.

Mr. Baldry: We have taken a series of measures since 1988 to boost the supply of low-cost housing in rural areas through local authorities and housing associations. The Housing Corporation has a clear target for new social housing in villages through its special rural programme under which £80 million has been allocated to rural local authorities for 1991–92 and 1992–93 to produce new low-cost homes. New planning guidance permits the development of low-cost housing for local needs on small sites not otherwise designated for housing.

Mr. Evans: Will my hon. Friend accept the thanks of my local authority, which is not a whingeing socialist local authority always complaining that it has no money for its housing needs? My local authority is working in close association with four housing associations to meet housing needs in our rural area. It has won bids for £4 million in grants for rural housing over three years. Much of that money has been paid to the housing associations because of their past effectiveness and not just because of needs. Will my hon. Friend give an assurance that money will be given to local authorities and to housing associations in future because of their past performance and not simply because of needs?

Mr. Baldry: My hon. Friend is absolutely right. I am glad to say that numerous housing associations are active in the Ribble valley. They are doing extremely good work in partnership with the local authority which is delivering well in its enabling role. I am glad to say that almost £2 million is being invested in new rural housing in the Ribble valley this year. That is very good news.

Mr. Trimble: I was especially glad to hear the last part of the Minister's original reply, which referred to planning guidelines. Does the Minister agree that it is important to ensure that housing becomes available in rural areas for local people, and that for that reason it is essential that the cost be kept down? Does he agree that the best way to keep the cost down is to increase the supply significantly?

Mr. Baldry: I entirely agree with the thrust of the hon. Gentleman's question. That is why we have clear planning policy guidance and why local authorities now have to bring forward development plans in which they have to identify clearly land for housing provision for the coming years.

Mr. Nicholas Winterton: I fully support what my hon. Friend has said, but does he accept that the wealthier a rural area is, the greater are the problems among the lower paid in the area? Does he accept that there is a need for greater resources to be devoted to areas such as that


covered by Macclesfield borough council to take account of the fact that many people in rural areas, especially young people, can no longer afford to live there?

Mr. Baldry: I am always glad to have my hon. Friend's support. We have taken forward initiatives because we acknowledge that there are particular problems in rural areas. It is because we recognise that there are challenges that the Housing Corporation has a special rural programme and there is the potential for special capital allocations to rural local authorities for the reasons that my hon. Friend has outlined.

Mr. Soley: When will the Government take seriously the voices of their Conservative local authorities, of the rural housing associations and, increasingly, of their own Back-Bench Members, such as the hon. Member for Macclesfield (Mr. Winterton), who is not a whinger as the hon. Member for Ribble Valley (Mr. Evans) would have us believe? When will the Government listen to those voices and recognise that they are saying that the villages of Britain are dying on their feet because of a lack of affordable housing? As the hon. Member for Macclesfield said, the problem is especially serious for young people whose roots are in villages and country towns, but whose futures are in a housing queue which gets constantly longer.

Mr. Baldry: This year we are investing £2 billion through the Housing Corporation for new, affordable social housing. We are committed to do that in the coming three years. A proportion of that money will go to rural areas. In addition, rural areas will have access to their own housing investment money. The Government are determined to ensure that every family has a decent home in which to live, whether in the town or in the countryside.

Mr. Dunn: In the context of housing needs and preserving village life, will my hon. Friend assure the House that every effort will be made to prevent the illegal encroachment of traveller families in our villages?

Mr. Baldry: As my hon. Friend knows, we are committed to reviewing the Caravan Sites Act 1968 and I hope that we shall be able to bring forward that review in the not-too-distant future.

Social Housing

Mr. Raynsford: To ask the Secretary of State for the Environment when he will publish estimates of the need for social housing in England.

Sir George Young: We publish projections of future household numbers based on demographic trends. It is not practical to sub-divide that and make a single estimate of the need for social housing because of the subjective judgment involved in assessing who should have access to social housing and the volatility of some of the factors influencing any assessment, such as house prices, incomes and interest rates.

Mr. Raynsford: Will the Minister reconsider his answer? Will he recognise that the Audit Commission not only made it perfectly clear in its recent report that it was possible and appropriate to carry out and publish such estimates, but its first recommendation said that the Government should publish estimates of housing needs. When will the Government take housing needs in this country seriously?

Sir George Young: I have in front of me some relevant paragraphs from the Audit Commission, which support what I have just said:
Definitions of need are value judgments … The point on the spectrum at which the definition of need is drawn is a matter of judgment and is partly conditioned by available resources".
It goes on to say that such forecasts are not easy. I hope that the hon. Gentleman will accept that there are imponderables which are difficult to forecast, some of which I have just listed.

Parcelforce

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine): I should like to make a statement about Parcelforce.
Parcelforce is the parcel delivery business of the Post Office. Formerly it was part of the Royal Mail, but it is now a free-standing unit with separate accounts. In a difficult, competitive market it has made a loss during the last two years. Through the determination of both management and staff, Parcelforce is making strenuous and encouraging efforts to turn itself round. I welcome this.
Parcelforce operates in a fully competitive market that has grown rapidly. Many of its competitors operate worldwide and are household names in this country. Thousands of other private sector companies also provide a parcel service, albeit on a smaller scale.
For the most lucrative sector of the parcel delivery business—the so-called "next day" market—Parcelforce now enjoys a market share of just 2 per cent. In the "later than next day" market, it has a 34 per cent. share. But the key point is that the vast majority of the work of Parcelforce is targeted at providing a service to business. Only 5 per cent. of the Parcelforce business deals with parcels sent from one person to another, while more than half the remainder consists of just a few large mail order contracts.
I can see no reason why Parcelforce should remain in public hands while operating in such a market. My intention is to privatise it.
At this stage, this is a statement of my intent; I have not yet asked the Post Office board to launch the sale process itself. I first wish to receive advice on the best way to transfer Parcelforce to the private sector. I shall, of course, want to involve the board of the Post Office fully in this.
In considering how privatisation might best be achieved, an essential requirement for the Government will be a continued universal parcel service at a uniform and affordable tariff. That is not negotiable.
What is constantly for consideration, however, is how those or any other services can best be delivered. The Parcelforce emloyees play a key role in this. I will therefore ask the Post Office to make available financial support to help the management and employees in putting together a bid for the business, should they wish to do so in competition with other potential bidders. The Government and the Post Office will of course wish to receive the best price possible for these public assets.
Parcelforce as a business will need to continue its recovery and maintain the confidence of its customers. I would expect any significant decisions on new investment to be left to the new owners.
My announcement today concerns only Parcelforce and not the Royal Mail or Counters. The Government are committeed to maintaining a nationwide letter service with delivery to every address in the United Kingdom, within a uniform structure of prices, and with a nationwide network of post offices. In the case of Parcelforce, our belief is that the essential requirements are best met in the private sector. I commend this view to the House.

Mr. Doug Henderson: In making this announcement, is not the President of the

Board of Trade threatening to undermine more than 100 years of universal parcel delivery service to every home and business in the country? Is he not meddling in a market which he knows is already competitive and which has many operators providing a wide variety of services, at a time when all operators, including Parcelforce, face major difficulties largely caused by the difficult trading conditions of a recession which last week the President of the Board of Trade himself described as the worst recession since the 1930s?
On a point of detail, has £50 million of the planned £250 million investment to develop eight new sorting centres gone ahead? Will he confirm that the source of funding for that investment was the cash generated by the profits of Royal Mail and Post Office Counters? Is any more of the planned £250 million cash injection to be committed by the Post Office to Parcelforce before privatisation? Is not that cash injection and the merging of the profitable Datapost letter and document service into Parcelforce another blatant case of public sector profits fattening up a public sector asset before it is sold off to the private sector?
Will the right hon. Gentleman confirm that, as a prelude to privatisation, the Government prevented the Post Office from linking Parcelforce in joint ventures with other carriers? Will the right hon. Gentleman acknowledge that that prevented Parcelforce from developing its business to meet new trading circumstances, especially the international market? Will he also confirm that many private carriers that currently cream off profits from more lucrative inter-city routes use Parcelforce to deliver their parcels to remote districts?
Does the right hon. Gentleman accept that, while part of Parcelforce operates as a commercially viable service, part operates as a vital public service to many regions of the country that desperately require it? Will he give a guarantee here and now that he will reject privatisation if a universal service obligation cannot be met now and in future?
Is this not a case of privatisation for privatisation's sake? If the right hon. Gentleman is so proud of the plans that he has unveiled today, why did not the Conservative party have the courage to include them in its manifesto three months ago so that the British people could vote on them? Is not the President of the Board of Trade hellbent on out-privatising his predecessors with a knack that will do nothing to improve any postal service to any business or home in any part of the country?
Is not this postal privatisation the height of political opportunism? It was furtively announced at the butt end of the parliamentary Session. The country does not need postal privatisation to help the Tories' friends in the City; it needs postal modernisation to secure quality services for the people.

Mr. Heseltine: I think that the hon. Member for Newcastle upon Tyne (Mr. Henderson) rather overstates his case. We brought forward the announcement, which otherwise might have come during the recess, as we thought it was good news in which hon. Members would like to share before they went on their summer holidays. I think that it probably enabled Opposition Members to psyche up each other's doctrinal obsessions, which were so decisively rejected at the last general election.
The hon. Gentleman asked me to reflect on the results of that election. To be fair, I should say that the overwhelming vote of confidence that the Government


received then encouraged them to look again at the rate of progress that could be made on Parcelforce—the electorate's support was an important part of the Government's thinking in making the announcement today. It will do the hon. Gentleman no good to indulge in the customary scare tactics with which the Labour party tries to hide its doctrinal and obsessional opposition to privatisation. As I said several times in my statement, the universality of the service is not negotiable. The only issue is who provides the service.
Anyone who has looked generally and widely at Post Office services is fully aware that the Post Office has a whole range of private sector activities to provide what the hon. Gentleman rightly describes as vital public services. Post Office Counters has 1,000 Crown offices and about 19,500 sub-post offices, many of them in the private sector, all providing a vital public service.

Mr. Richard Page: I welcome my right hon. Friend's announcement. Does he agree that the object is to introduce the culture and ethos of private enterprise into this improving but still loss-making operation and into an area in which competitors are making a great deal of money? Who or what will be responsible for the fixing of the universal tariff so that operations are carried out on a level playing field?

Mr. Heseltine: I wholly agree with my hon. Friend's view about the need to inject the culture of the private sector, which will include—as I think the House and, certainly, my hon. Friends will broadly welcome—the opportunity for managers and people who work in the industry potentially to become part owners of it, a concept which has proved so successful elsewhere. The definition of affordability is bound to remain a public sector ministerial responsibility.

Mr. Malcolm Bruce: When Parcelforce is privatised, will there be a uniform parcel tariff so that a parcel from Truro to Aberdeenshire or Shetland can be sent at a flat rate, because there are surcharges now? Does the right hon. Gentleman accept that there has been a deterioration in the service in preparation for privatisation, with only one delivery attempted? If that delivery is unsuccessful, the recipient is required to go to a collection point, which may be 30 miles away. That is not an improving service but a deteriorating one.
I welcome the suggestion that the employees might be given an opportunity to buy the business. Will the right hon. Gentleman assure us that it will not be sold to a competitor, and will he reaffirm without equivocation that the Government intend to keep their sticky fingers off the Royal Mail?

Mr. Heseltine: Perhaps the hon. Gentleman missed what I said about the universality of the service. I made it as clear as possible that these matters are not negotiable—I think that those were the words I used—and were the subject of a clear manifesto commitment at the last. election. I unhesitatingly reaffirm the Government's policy.
The hon. Gentleman suggested that the service has deteriorated in anticipation of privatisation. That is unlikely because I discussed the form of privatisation with the chairman of the Post Office board only within the past few days, and it is unlikely that that has filtered through to cause a deteriorating service in the meantime.
Of course I cannot give an undertaking about the ultimate purchaser of Parcelforce. We must market it and secure the best possible deal in the taxpayers' interests.

Mr. Alan Duncan: Does my right hon. Friend agree that the employees of Parcelforce should look upon his announcement as a great opportunity? Does he further agree that their prospects would be ill served by listening to the backward-looking advice of the Opposition?

Mr. Heseltine: My hon. Friend is right. He is drawing on the experience of privatisation because, despite all the endeavours of the Opposition, it has created one of the greatest share-owning democracies in the world. In support of my hon. Friend, I hope that the Opposition will continue to yammer away in this rather obsessional fashion because it will keep them on the Opposition Benches.

Mr. John McWilliam: Does the President of the Board of Trade agree that the staff of Parcelforce have co-operated magnificently with the changes that have been introduced over the past few years? Does he also agree that his offer to them of a universal service into which they can buy and a universal price does not seem to make economic sense? There must be real worry, particularly among people in rural areas, because they rely on Parcelforce, on the old Royal Mail parcel services, for essential services. In general, such people are very badly paid and do not have the means to pay for an economic service.

Mr. Heseltine: The hon. Gentleman makes an important point. Let me clarify one aspect of what he had to say. I did not say that Parcelforce will have to provide a universal service. What I am saying is that the Government will ensure that there is a universal service. I draw the attention of the House to something that most people will already know, and that is that the Royal Mail already provides a support service for Parcelforce in many parts of the country. Therefore, it is perfectly possible to distinguish between the two.
The other point that the hon. Gentleman makes about rewarding the employees of Parcelforce is also of concern to me. There has been a considerable growing market in many of the services, but the growth of the market has not been one in which the Post Office has shared to the scale that it might. One of the opportunities of setting this part of the Post Office free is that it might be able to expand into directions at home and overseas which, characteristically, publicly owned industries have been precluded from doing.

Mr. John Marshall: Will my right hon. Friend confirm that Parcelforce has lost more than £150 million in the past two years? In view of that, and the fact that it has only 2 per cent. of the next-day parcel market, is not the choice facing Parcelforce clear—either to wither in the public sector or to expand in the private sector? Does my right hon. Friend agree that every industry that has been privatised has increased investment, increased productivity and improved the service, and that that is what Parcelforce will do?

Mr. Heseltine: Sadly, my hon. Friend is right to draw attention to the scale of the losses. The figure for the past two years is £155 million, although it is fair to say that the loss last year was significantly less than that for the year


before. It is because we wish to give the company the opportunity to trade in the private sector and to seize the opportunities of what has been an exciting market for many companies but not for Parcelforce that we seek to take the decisions that we are taking today.

Mr. Tony Benn: Is the Minister aware that what he is setting aside today is the culture of public service that was established by Rowland Hill and has been followed by every Postmaster-General, Conservative, Labour and Liberal, for more than 100 years, based on the clear understanding that it is much more expensive to deliver letters and parcels in remote areas than it is in urban areas? When the admission was drawn from the Minister that there would no longer be a requirement for Parcelforce to meet the needs of the rural areas, he was explaining the loss that it has suffered in recent years because it has had to meet that requirement. Is not the right hon. Gentleman aware that, as President of the Board of Trade, he is presiding over another piece of loot and plunder of the public services in the interests of his grubby little business friends who financed his election success?

Mr. Heseltine: The right hon. Gentleman has much experience, as I believe that he presided over part of the organisation during his long ministerial career. One reason why the losses of the past two years were discovered was that it was realised that there was an accounting error in the way in which the overheads were allocated in the system. It was nothing to do with the cultural change. But if we are talking about culture—I should be happy to do so in this context—let us face the fact that the most eloquent example of the quality of the culture is that Parcelforce has 2 per cent. of the next-day delivery and 34 per cent. of the later-than-next-day delivery. That shows that the customer has decided that the culture in the public sector is not good enough.

Mr. Phillip Oppenheim: At a time when Governments all over the world are privatising rather than nationalising, including even socialist Governments in Australia, Spain and France, why does my right hon. Friend think that our own dear old Labour party persists in burying its head in the sand and parroting the tired old dogma of the forties, fifties and sixties in wanting to keep in public ownership a loss-making operation, losses which under private ownership could be made up and put into essential areas of public spending, such as health and education, rather than poured down the drain of a loss-making, state-owned industry?

Mr. Heseltine: My hon. Friend may feel that, if the Labour party talks the language it does, the most eloquent thing it can do is to bury its head in the sand.

Mr. Peter Hain: Surely the President of the Board of Trade blew the gaff on his commitment to maintain a universal service when he dumped it back on the public sector, in the form of the Royal Mail. What guarantee can he give Parcelforce employees that their pension rights will be protected, given that the Post Office pension fund will be dominated by the public sector Post Office? By surreptitiously stripping the Royal Mail prefix from the Parcelforce title, has not the right hon. Gentleman indulged in sharp practice? Not least, he has

avoided direct conflict with an important person who has declared her opposition to postal privatisation—the Queen.

Mr. Heseltine: It is with some regret that I tell the hon. Gentleman that I did not even know until yesterday that the Royal Mail prefix had been dropped from Parcelforce. If that is seen as some great constitutional lacuna in my performance, let me explain to the House——

Mr. Hain: The right hon. Gentleman answered a question from me on that matter only three days ago.

Mr. Heseltine: What is two or three days? I will give the hon. Gentleman the explanation as I understand it—which is more bizarre than the truth. Some old vans were repainted and in the course of that work the words "Royal Mail" were not signwritten, only the word "Parcelforce". If the hon. Gentleman can see a sinister plot in that, I admire his ingenuity but I do not share it.
The hon. Member for Neath (Mr. Hain) raised a serious point to which I will give a serious answer. There is now wide experience of protecting the rights of public sector pensioners as they transfer into the private sector. I give the House my assurance that the same diligence will apply in this case.

Several Hon. Members: rose——

Mr. Deputy Speaker (Mr. Michael Morris): I would like to call all hon. Members who have risen in their places, but I make a plea for succinct questions.

Mr. Andrew Mitchell: Is my right hon. Friend aware that his announcement has been awaited by millions of customers of Parcelforce who want to see skill, innovation and entrepreneurial flair brought to this important market? Is it not richly ironic that, at a time when Labour is seeking to change its leader in a futile attempt to attract the electorate, it cannot change the economic policies that have shackled Opposition Members to the Benches opposite and ensured that they do not emerge into the modern economic world?

Mr. Heseltine: I thought that my hon. Friend was about to suggest that Parcelforce should conduct the retiring leader of the Labour party to some unknown destination. My hon. Friend is right when he says that our decision is a reflection of customer choice. We believe that there will be improving opportunities for those working in Parcelforce, and for customers to enjoy a more sophisticated service.

Mr. Alun Michael: Does the President of the Board of Trade accept that today's announcement justifies the worst fears of the staff and public in recent years? As privatisation has invariably led to increased prices—usually affecting the most vulnerable people—will the right hon. Gentleman give an assurance that his universal service will be available at a price that is affordable to all, including those living in remote parts of the country as well as those in the cities?

Mr. Heseltine: I thought that I had made that clear, but as the hon. Gentleman raises an important point I will repeat my remarks because I do not want him to be in any doubt. By universality, we mean that the service will apply from one end of the country to the other; we mean that there will be a standard rate applying from one end of the


country to the other; and we mean that the rate—which will be at ministerial discretion and therefore accountable to the House—will he judged as affordable.

Mr. Bernard Jenkin: I welcome in particular my right hon. Friend's assurance that the Post Office will assist management and employees in their potential bid for a management buy-out, but will he ensure that management have free access to advice and to investors, and that management and investors can talk freely to the vendors? That would avoid the situation that arose in previous privatisations when management were starved of access to free advice and so did not get a fair crack of the whip.

Mr. Heseltine: My hon. Friend raises a most important point. It is one that I have discussed with the chairman of the Post Office, who is supportive of my announcement today. I shall ensure that my hon. Friend's views are conveyed to him, because they coincide very much with my own.

Mr. Tam Dalyell: As a distinguished gardener, the Secretary of State may obtain his gardening sweaters from Mr. Tulloch of Shetland and his bulbs from the Scilly isles. He said in his statement that a universal parcel service would continue to operate at a uniform and affordable tariff. By what mechanism will that be ensured for the islands and other remote areas? How will it be done?

Mr. Heseltine: It will be done in much the same way as it is done today. Ministers and the Post Office make decisions about what constitutes an affordable cost in the light of the evidence, the economics and the service that they must provide. That can be debated in the House, and, as the Minister responsible, I would take a personal interest in ensuring that a realistic price was part of the structure of any new system that we devised, having regard to what people could afford.

Mr. Graham Riddick: Does my right hon. Friend agree that Parcelforce is operating in a highly competitive market, and that it is wholly inappropriate for a state-owned firm to operate in such a market in which there is a danger of cross-subsidy from the letters monopoly? Was not the "nationalisation at any price" mentality that we have observed in Opposition Members a significant contributory factor to Labour's defeat in the general election?

Mr. Heseltine: My hon. Friend has made an important point. There are, of course, separate accounts for Parcelforce, which revealed the £155 million loss to which I referred. The funds to meet those losses, however, have come from other Post Office revenue, and to that extent Parcelforce is indeed the beneficiary of cross-fertilisation.
My hon. Friend also made an important point by reminding us that Parcelforce is competing in a very competitive market. My experience leads me to believe that it will be able to compete more freely and responsively in the private sector.

Mr. Graham Allen: Does the President of the Board of Trade admit that he has literally been caught playing pass the parcel, in that the loss-making parts of Parcelforce will be handed on to the Royal Mail? What will happen when the music stops? Will Royal Mail be next on the right hon. Gentleman's list?

Will he also tell the House and those who work for Parcelforce how many redundancies will result from his proposals?

Mr. Heseltine: The hon. Gentleman is well aware that I cannot anticipate the market trends of this or any other industry. No Government have been able to shelter the employees of public or private-sector companies from redundancies caused by changing market trends; it is naive to pretend that one has that ability, or would want it.
The hon. Gentleman seems to ignore the fact that Parcelforce is losing money. The privatisation will not deprive the Exchequer of a positive cash flow. Parcelforce is losing money, and it is being cross-subsidised. The only issue is whether the public will obtain better value for money, whether the employees will have a better opportunity and whether the marketplace will enjoy greater competition. What is not at stake is the responsibility to deliver a universal service at an affordable tariff.

Mr. Geoffrey Dickens: Does my right hon. Friend agree that a company in the private sector must be efficient, produce competitive prices and deliver on time if it is to survive and grow? If a textile mill in my constituency, on the outskirts of Oldham and Rochdale, required a component, it would need to be able to rely on the delivery time: that would he critical. Does my right hon. Friend agree that it is better and more efficient for commerce, trade and industry to allow Parcelforce to compete and fight to survive and grow, thus giving a better service to my constituents?

Mr. Heseltine: The people of Littleborough and Saddleworth are undoubtedly a vital part of the make-up of the marketplace to which our new privatised Parcelforce will wish to direct its attention. I shall ensure that my hon. Friend's views are transmitted to them.

Mr. Andrew Faulds: If all this is in the general interest of taxpayers, how does it equate with an efficient and universal parcel delivery service?

Mr. Heseltine: The hon. Gentleman will understand that by means of the competitive process we can often obtain a cheaper price in the private sector for delivering a public service.

Mr. John Whittingdale: Is my right hon. Friend aware that all those businesses that require, indeed insist upon, a reliable and affordable next-day parcel delivery service will welcome the increased opportunity for competition that his announcement provides? Does he not agree that Parcelforce will stand a much better chance of increasing its present puny share of the market once it is in the private sector?

Mr. Heseltine: My hon. Friend touches on a wider issue. It is important to recognise the extent to which in recent years the private sector has eroded a great deal of the new market in delivery services. One of the exciting opportunities to which employees of Parcelforce will respond is that now they will be able to compete effectively in that growth market without the constraints that previously held them back.

Mr. Bob Cryer: It appears from the Minister's comments that it is ministerial assurances that


will ensure the maintenance of universal delivery at a standard charge. Does the right hon. Gentleman recall going on television many months ago and giving numerous assurances about not standing against the then Prime Minister, Margaret Thatcher? In view of the varying positions he has taken on many issues, would it not be better if we had legislation to guarantee the universal service at a standard charge? If not, will not people on low incomes, such as pensioners, face a massive increase in charges, while the only people to benefit will be the fat cats in the City who contributed to Tory finances at the last general election?

Mr. Heseltine: The hon. Gentleman has his own obsessions, which I understand full well. It is because they are obsessions peculiar to him that they have so little appeal outside this House.

Mr. Peter Thurnham: While I welcome my right hon. Friend's excellent statement, may I ask him to bear in mind the outstanding performance of Document Interlink Ltd. in my constituency, which has built up a successful organisation that specialises in next-day guaranteed delivery of letters?

Mr. Heseltine: My hon. Friend encourages me in what I do. I shall certainly bear in mind the excellent example that he has drawn to the attention of the House.

Mr. David Winnick: Is it not of some interest that this statement has been made just before the House goes into the long summer recess, a decision based on sheer political dogma, and that we are not being told what is to be done about the growing and deepening economic crisis and the fear of higher interest rates? Would not that have been a far more relevant statement to make today than this nonsense which has just been announced by the Secretary of State?

Mr. Heseltine: I thought that the case of those who sit on the Opposition Front Bench was that I should have made the announcement earlier. Now, apparently, it should not have been made at all and my right hon. Friend the Chancellor of the Exchequer should have been here to tell the House that we are pursuing the only sensible policies upon which economic recovery depends.

Mr. Nigel Evans: Does my right hon. Friend agree that some of the scare stories that we now hear from Opposition Members were excctly the same stories as we heard when British Telecom was privatised, particularly about public telephone boxes in rural areas? Is it not a fact that since privatisation there are more public telephone boxes in rural areas and that far more of them are working than ever before?

Mr. Heseltine: My hon. Friend draws the attention of the House to the tragedy of the Labour party. The longer the Opposition go on clinging to their outdated ideas and peddling their prejudices, the less credible they are with the electorate. If there is one distinction to be drawn between the privatisation of British Telecom and the privatisation of Parcelforce, it is simply that the Labour party's arguments today are even less credible than they were when British Telecom was in its sights.

Mr. Nigel Spearing: The President of the Board of Trade has referred to the opportunities for the employees of Parcelforce, of whom, as he may know, there are 1,000 in the West Ham area of Newham, in my constituency. Does not the competition that he is now introducing mean, however, that other people will have the opportunity to make my constituents redundant? As to universality, if it is not necessarily to be Parcelforce, who will be responsible for it? The removal of "Royal Mail" from the Parcelforce title is a means, is it not, of getting round the guarantee given by Lady Thatcher that Royal Mail would not be privatised?

Mr. Heseltine: The hon. Gentleman has not been listening closely to what I have been saying to the House. We are not discussing abandoning the pledge of universality. That remains a public commitment. It is a Government policy which was in our election manifesto and I have repeated several times that we do not intend to prejudice that position. We are not concerned about whether there will be universality, uniformity or a standard tariff, because we are determined to preserve all those things. The only issue being dealt with in this case—the same question can be asked in other cases—is how to implement the commitments. It is apparent to anyone studying the Post Office that in many cases the policy commitments which may be those of the Government, are being implemented in the private sector. I gave the clear example of sub-post offices. There are far more of those in the private sector than there are Crown post offices in the public sector.

Mr. John Bowis: Is my right hon. Friend aware how long the world has been awaiting his statement? When setting up his postal service, Rowland Hill indicated that in due course he expected it to be run by the private sector. "In due course" has been a long time in coming. Will my right hon. Friend ensure that letter postal services are not too far behind, if not in privatisation, at least in opening up the service to competition?

Mr. Heseltine: I understand that Rowland Hill made that commitment 150 years ago. I can only apologise to the House for having taken so long to make this announcement.

Mr. Harry Barnes: Will not the privatisation of Parcelforce take away another area of parliamentary questioning? There have been many privatisations in energy which have resulted in getting rid of a Department and many agencies have been established about which we cannot ask questions. Is it not a fact that the Government's ideological programme attacks partliamentary democracy?

Mr. Heseltine: I wonder whether the hon. Gentleman has ever questioned his obsession with parliamentary questioning about this service. What is the point of being able to question Ministers about 2 per cent. of the next-day service when one cannot question the 98 per cent. of the service in the private sector? What is the point of thinking that one exercises any effective control over quality of service if in the later-than-next-day service one can talk about 34 per cent. with Parcelforce but not about the 66 per cent. in the private sector?

Sir Michael Grylls: Will my right hon. Friend accept that his statement will be warmly


welcomed, not least because of the extra competition it will bring that will be in everybody's interest? When carrying out the privatisation, will he use his influence to try to ensure that the employees in Parcelforce have an opportunity of owning the business? He could perhaps take as his role model the huge success of the National Freight Consortium, which has a great deal of employee ownership. Will he do everything he can to help Parcelforce to succeed in the same way as the NFC did?

Mr. Heseltine: I understand my hon. Friend's concern, which I share, for encouraging employees to become owners in the businesses for which they work. I have discussed the idea with the chairman of the Post Office and he has readily agreed that the Post Office will make funds available to help employees and managers to prepare a bid if they should so wish. However, it is not a responsibility of the Government to make up the minds of employees or managers about the nature of the commercial decision that they may choose to take. Our task is to ensure that they have an opportunity to take it, not to take it for them.

Mr. Chris Smith: The President of the Board of Trade has said that he is not proposing today to privatise, in whole or in part, the Royal Mail letters service or counter service. However, he has conspicuously failed to rule out privatisation in principle. Will he now do so?

Mr. Heseltine: The hon. Gentleman was not listening to what I said. He asked about Post Office Counters and whether I will rule out privatisation. Of the 18,500 post offices in Britain. 17,500 are privatised and 1,000 of them are Crown Offices. A year ago, instead of the 1,000 Crown Offices, there were 1,150. Therefore many have been transferred into the private sector in the past 12 months. It is outside the experience of any hon. Member that I should say that this is all a public-sector-provided service. It is a public service in terms of universality, uniformity and affordability, but the delivery mechanism is spread widely in the private sector.

Points of Order

Mr. Max Madden: On a point of order Mr. Deputy Speaker. In addition to your duties in the House, you are a constituency Member. In that spirit, will you deprecate a decision of Customs and Excise, which is due to be announced on Friday, to close an office in my constituency with the loss of more than 100 jobs and to transfer it to Leeds? That announcement will he made without——

Mr. Deputy Speaker (Mr. Michael Morris): Order. I do not think that I can anticipate anything that might happen in the future.

Mr. Tony Marlow: On a point of order, Mr. Deputy Speaker. You will be aware of the European Commission's outrageous suggestion that the United Kingdom's budget rebate should be reduced by 25 per cent. Not content with taking the powers of the House, it is taking our constituents' money and our privilege over supply. We are about to begin the recess, but this matter has grave implications.
May I, through your offices, Mr. Deputy Speaker, ask the Government to make an urgent statement on the issue? My understanding has always been that we must have unanimity for any change in the budget. If so, why is the Commission making this outrageous suggestion now? It must know that——

Mr. Deputy Speaker: Order. The hon. Gentleman said that it is a suggestion. The Leader of the House is on the Front Bench and will have heard his submission.

Mr. Andrew Miller: May I raise a matter of which I gave Madam Speaker and the Chancellor of the Exchequer's office notice? I received yesterday representations from staff of the National Economic Development Office about the implementation of the Chancellor's statement on 16 June. Although Labour Members disagreed with the intention behind the statement, there was consensus about the Chancellor's praise for the staff and director-general of the office. In his statement, the Chancellor gave commitments regarding employment opportunities in the Board of Trade.
The solemn undertaking that was given to the House has been acted on in part, but in a memo dated 7 July some of the staff were given only six days to apply and two days for interviews. Some have not been invited at all. I should be grateful, recognising that you, Mr. Deputy Speaker, are not responsible for Government statements, if you would use your good offices to bring this matter to the Chancellor's attention and ask him to ensure that it is clarified and that the spirit of the statement is met in full.

Mr. Deputy Speaker: Madam Speaker was grateful to the hon. Gentleman for giving her prior notice. Ministers on the Front Bench will have heard the hon. Member's submission. It is not a matter for the Chair.

Mr. John McAllion: We have just heard a statement from a senior Minister that he described as a statement of the Government's intent to privatise a nationalised industry. On 7 February 1985 we had a statement about the Government's intent to privatise the nationalised water industry in England and Wales. On both occasions, the Government have recognised their


responsibility to keep the House informed before making any other public statement about their intentions. Yet, all this week, without making a statement to Members, Scottish Office Ministers have been trumpeting in the press their intention to privatise Scottish water services. As this is supposed to be a unitary Parliament, how can the House force Scottish Office Ministers to show it the same respect as Ministers in English and Welsh Departments have shown?

Mr. Dennis Canavan: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Is it on the same point?

Mr. Canavan: Yes. I wish to support the point that my hon. Friend the Member for Dundee, East (Mr. McAllion) legitimately made.
It is part of our parliamentary tradition that, if a Government seek to change the ownership of a major industry or service, they seek a mandate from the people by including it in their manifesto. In neither the English nor Scottish manifesto was there mention of the privatisation of the Scottish water service, which is owned and administered by local authorities. I have raised the matter in written parliamentary questions, but I have received very little information compared with what is being almost deliberately leaked to the press. Initially, Ministers denied any possibility of privatising Scottish water but then started making encouraging, positive noises to welcome such a proposal. It seems that members of the press are better informed than Parliament about the issue.
The Government have no mandate—certainly not from the people of Scotland—to privatise Scottish water. Indeed, even by British standards they have no mandate to do so. If they are intending to privatise Scottish water we should have a statement from the Minister before the House goes into recess.

Mr. Deputy Speaker: Both hon. Gentlemen know that I have no responsibility for Government statements. They have made their point and I am sure that it has been heard by the Leader of the House.

Mr. Madden: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Another point of order?

Mr. Madden: I am sorry to press you, Mr. Deputy Speaker. I was in no way——

Mr. Deputy Speaker: Is it on the same issue?

Mr. Madden: May I make the point that I wanted to make——

Mr. Deputy Speaker: Is it on the same issue that was raised before—yes or no?

Mr. Madden: It was to urge you——

Mr. Deputy Speaker: I understand entirely the point that the hon. Gentleman raised before and I gave a ruling.

Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. As tomorrow consists of timed Adjournment debates, could you give us notice of any application that might have been made for a statement tomorrow? We need to know today, if possible. Have you received any application for a statement about the wretched, appalling proposal to close the Customs and Excise revenue office in Bradford?

Mr. Deputy Speaker: No, I have had no application, but I shall be here at 9.30 am tomorrow.

Mr. McAllion: rose——

Mr. Deputy Speaker: Is it a new point of order?

Mr. McAllion: It is to support——

Mr. Deputy Speaker: Order. The point of order does not need any support. I gave a very clear answer.

Airports (Town and Country Planning)

Mr. John Denham: I beg to move,
That leave be given to bring in a Bill to bring the operation of certain categories of civil airports and aerodromes within the scope of planning legislation; and for connected purposes.
There is a revolutionary expansion in air travel. Far more people are flying in far more aircraft to far more destinations. Good air links, especially to Europe and within the United Kingdom, are increasingly and rightly seen as an essential element of regional economic development. However, there is a down side to the benefits. More and more airports, many long-neglected, are being pressed into greater use. Those who live under their flight paths see not benefits, but only more noise and more pollution.
Southampton Eastleigh airport is set to expand from 400,000 passengers to 1 million passengers a year. There will be many benefits throughout South Hampshire, but thousands of my constituents in Townhill Park, Bitterne Park, and Midanbury fear that their lives, already disrupted, will become a misery. Living on a rising hillside a mile or so from the runway, they anticipate a future of aircraft flying low overhead from the early hours of the morning until late at night, of unusable gardens on summer afternoons and of noise and air pollution.
Naturally, they expect the planning system and their local council to be able to protect them and to balance their real losses against the potential gains. However, the planning system at present is woefully deficient. Local councils do hot have the necessary powers. Indeed, they have more powers to control the noise from model aircraft than noise from the real thing.
The Government's consultation paper "Control of Aircraft Noise" set out the admirable principle that
those responsible for causing noise should be responsible for keeping it to a minimum arid for incurring the costs of doing so. They should also be accountable to local people.
Sadly, that is not how the system works.
The system is a lottery. If developments take place on the ground—for example, new terminals—there may be some controls over expansion but not if expansion uses existing facilities. The powers which do exist lie with the local authority where the airport is situated but not, as in Southampton, where those most affected live.
Many powers that exist or which might be created—to force the Civil Aviation Authority to take environmental factors into account, to require the soundproofing of buildings or to require airports to agree a statutory noise abatement plan with local councils—are exercised at the whim of the Secretary of State for Transport. Most have never been used and apparently never will be used except for the largest international airports.
Local councils do not have explicit powers to control expanding airport operations. At Southampton Eastleigh, planners have instead negotiated a planning agreement that contains some significant controls. I believe that, within its limited powers, the Eastleigh council, in consultation with the city council, has done a good job, but the agreement falls well short of local aspirations. In any

case, planning agreements are always a murky, unsatisfactory process. They lack the transparency and openness that good, accountable planning requires.
The Southampton agreement has yet to be signed. Its most crucial element—a limited ban on night flights—has been postponed for 12 months already. Because the agreement is linked to an airport business park development, there must be some doubt whether it will ever be signed while this recession lasts.
My Bill will give local authorities the explicit right to control directly the expansion of airport operations. These powers would be triggered by any significant expansion in operations, whether sudden or incremental. The powers will cover the times of use, the number and types of aircraft movements and, subject to the proper role of the CAA, the routing of aircraft into and out of the airport. Councils will gain explicit powers to enforce noise control measures and to require monitoring and remedial action for noise, air pollution and vortex damage. Where two or more local authorities are significantly affected they will be required to exercise these powers collectively.
Any local planning system would be subject to appeal and to the balancing of regional and national interests with purely local interests. But my Bill will bring about a much-needed shift in power to local people and their elected representatives. Airports are probably the last major polluters, largely free of pollution control and not subject to rights of redress for individual citizens. Of the 250 airfields in the United Kingdom, only three currently come under the full force of existing powers. It is time that this situation was ended, and that is the purpose of the Bill.

Mr. James Hill: May I say a few words?

Mr. Deputy Speaker (Sir Michael Morris): Is the hon. Member opposing the Bill?

Mr. Hill: Yes, I am. I am opposing it because it does not go far enough. This has been a problem in Southampton for many years.

Mr. Deputy Speaker: The hon. Gentleman has been in the House for many years, and he knows that that is not a negative. It is not acceptable, and I ask the hon. Gentleman to resume his seat.

Question put and agreed to.

Bill ordered to be brought in by Mr. John Denham, Mr. Neil Gerrard, Mr. D. N. Campbell-Savours, Mr. Mike Hall, Mr. Terry Davis, Ms. Estelle Morris, Mr. Jamie Cann, Mr. Clive Betts, Mr. Nigel Spearing, Mr. John Garrett, Mr. Kevin Barron and Mr. Ron Davies.

AIRPORTS (TOWN AND COUNTRY PLANNING)

Mr. John Denham accordingly presented a Bill to bring the operation of certain categories of civil airports and aerodromes within the scope of planning legislation; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4 December and to be printed. [Bill 61.]

Orders of the Day — Human Fertilisation and Embryology (Disclosure of Information) Bill [Lords]

Order for Second Reading read.

The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville): I beg to move, That the Bill be now read a Second time.
This is a technical, but very necessary Bill, which seeks to put right certain unforeseen consequences of the section of the Human Fertilisation and Embryology Act 1990 which dealt with confidentiality. The Bill is very narrowly defined. It seeks only to relax the restrictions on disclosure of information by people to whom a licence applies or to whom directions have been given, as contained in section 35(5) of the 1990 Act. Hon. Members may find it helpful if I explain the background to this matter and then briefly describe the Bill.
Information obtained during treatment for infertility can be extremely personal and private. Parliament recognised this in deciding that the Human Fertilisation and Embryology Act 1990 should impose a stronger duty of confidentiality than existed under the common law in relation to such information.
The 1990 Act therefore introduces a criminal sanction for breaches of the confidentiality provisions in section 33 of the Act. The criminal sanction in relation to section 33(5) of the 1990 Act applies only to the licensed person who initially discloses the confidential information. Breach of that provision is a criminal offence punishable by up to two years imprisonment, or a fine, or both. That sanction is in addition to the existing common law which protects confidential information.
Since the 1990 Act came into force, practical experience has shown that the provisions on the disclosure of information by licensed clinicians were in some respects too tightly drawn. They have led to unintended risks and difficulties. As it stands, the 1990 Act prohibits licensed clinicians, with some specified exceptions, from disclosing identifying information about a patient's treatment to anyone except the patient herself. They are prohibited from disclosing it to members and employees of the Human Fertilisation and Embryology Authority or other people covered by a licence for the purpose of licensed activities. The practical effect has been found to be that the doctor cannot pass on identifying information, even with the patient's consent, for example to the patient's general practitioner.
The intention was that patients should have maximum control over the information about their treatment. However, it has become clear that the restrictions imposed by the Act in certain instances went too far. The following example illustrates this point. In rare cases, the ovaries of a woman may be hyperstimulated as a result of super-ovulatory drugs. This could result in a dangerous, possibly life-threatening condition which may go unrecognised because a doctor other than a licensed clinician who treats her cannot be given details about her infertility treatment. If clinicians were to do all that they might wish to do to protect the health of their patients,

they would—under the Act—have to break the law. Clearly, it is not right that they should be put in that position.
Another example of the unintentionally over-restrictive nature of section 33 of the Act is that it prevents the disclosure of information for legal purposes. This means that a licensed person may not be able to defend him or herself if sued by a patient. If a doctor or other person to whom a licence applies is sued by a patient who has undergone treatment, he or she cannot give his or her legal adviser information about treatment given for an identifiable individual. The doctor would therefore be left in an unfair and untenable position in relation to the patient by whom he or she is sued, who is subject to no constraints under the Act.
When the disclosure provisions in section 33 of the 1990 Act were debated, this House and another place both decided that the person to whom the confidential information relates should retain as much control over the dissemination of that information as possible. The Government's view remains that this is right, but it was not the intention that the consequences that I have described should result.
I turn now to the detail. The Bill seeks to make certain specified relaxations in the restrictions on the disclosure of information by licensed clinicians imposed by section 33 of the Human Fertilisation and Embryology Act 1990. Section 33(6) of the Act contains exceptions to the general restrictions. The Bill adds further exceptions, removing the criminal sanction from disclosure in specified circumstances and for particular purposes.
Clause 1(2) inserts three new paragraphs into section 33(6) of the 1990 Act. Paragraph (f) relates to the necessary—I repeat, necessary—disclosure of information before or in connection with proceedings, including legal proceedings and procedures for dealing with complaints. This will deal with the problem that I have just described of the clinician being unable to pass identifying information to his or her solicitor. Access to necessary identifying information in connection with complaints procedures, which is also prevented under the existing provisions, will be permitted under paragraph (f).
Paragraph (g) applies to one narrow aspect of treatment involving a surrogate mother. It enables a licensed clinician to confirm, for the purposes only of an application for a parental order under section 30 of the Act, that the gametes of a particular person were used in treatment services which involved the child being carried by a woman other than the wife of the couple seeking the parental order. Without that provision, the couple seeking the parental order—that is, the couple who commissioned the surrogate mother—might have to prove their genetic relationship to the child through DNA testing, which is time-consuming, and an unnecessary imposition. The provision seeks to simplify such proceedings.
Paragraph (h) deals with inconsistencies between the 1990 Act and the Access to Health Records Act 1990. The latter gives rights of access to records in a number of cases and, in particular, access by specified persons to the records of patients who have become incapable or who have died. The inconsistency arises because the Human Fertilisation and Embryology Act does not allow access in those circumstances—in cases where infertility treatment has been given. That provision will make it possible for the personal representatives, or for a person appointed by a


court to manage the affairs of a patient, to pursue claims where the death or incapacity is alleged to have resulted from infertility treatment.
Subsection (3) of the Bill inserts seven subsections, (6A) to (6G). Taking those subsections in order, (6A) prevents the disclosure of the identity of a third party whose gametes were used for the purposes of treatment services when revealing information in connection with proceedings provided for by new paragraph (f). Subsections (6B), (6C) and (6D) allow for information to be given with the consent of the individual or individuals receiving treatment.
I stress that consent is an essential feature of those provisions. The subsections will enable a licensed clinician, with the patient's consent, to pass information about treatment to the GP or to others associated with the treatment, or to anyone specifically authorised by the patient. They will also allow—again, subject to consent—access to certain information for the purposes of clinical and financial audit. Subsection (6E) permits the disclosure of information about an individual's treatment without the patient's consent, in the event of a medical emergency involving that person. Such disclosure can take place only when it is not reasonably practicable to obtain the patient's consent.
Subsection (6G) contains an affirmative regulation-making power to provide for further exceptions to section 33(5) of the 1990 Act. The provisions in the Bill deal with the specific difficulties which have come to our attention. However, we cannot be sure that further practical experience will not identify new situations which could create difficulty. Therefore, it seems sensible to anticipate such an event by including in the Bill a limited regulation-making power, subject to the affirmative procedure, enabling provision to be made for future exceptions. This means that further exceptions, should they be necessary, can be provided for and debated in this House without the need for another Bill.
Subsection 5 of clause 1 makes it clear that the provisions in the Bill will apply to information obtained before as well as after the legislation comes into force.
Finally, clause 2 provides for the short title, and for the extension of the Bill to Northern Ireland and to the Channel islands. The Bill has no implications for public funds.
The Government would not be seeking the measure if satisfactory alternative ways of resolving the problems which have come to light were available. In conclusion, I emphasise that the circumstances in which disclosure would be permitted are closely defined in the Bill and, except in specified circumstances, the patient's consent will be required before any identifying information can be disclosed. I commend the Bill to the House.

Ms. Harriet Harman: I thank the Minister for his full explanation of the Bill. As he knows, it was discussed fully by their Lordships, and several matters which might have needed clarification were explained in another place.
As you will know, Mr. Deputy Speaker, the last time the House debated this issue we were discussing the parent legislation, the Human Fertilisation and Embryology Bill. This is not the occasion to rehearse the arguments of principle in that Bill—the continuation of embryology

research. However, since that Bill was enacted there have been two developments for which we had all hoped and which bear out the fact that the House was correct to pass it. There have been great advances in research into identifying and increasing our understanding of genetically transmitted disorders.

Mr. Malcolm Chisholm: Does my hon. Friend think that infertile couples can still get infertility treatment under the national health service now that hospitals are opting out?

Ms. Harman: I thank my hon. Friend for making that point. As it is the responsibility of GP budget holders and district health authorities to purchase services for people who are on their patients lists or who are within the district health authority area, there has been much concern that in vitro fertilisation and other specialist services for people with infertility problems will not be available under the NHS. I take this opportunity to ask the Minister to reassure us that he will monitor the purchasing patterns of GP budget holders and of district health authorities and to confirm that he sees a place for infertility services in the NHS.
The importance of the 1990 Act was that it regulated research and the treatment of infertility. We want to be sure that treatment is not only regulated but available under the NHS, and not just to those who can pay for it. The intervention by my hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) gives me the opportunity to put that point to the Minister.

Dame Elaine Kellett-Bowman: The hon. Lady referred to advances in research into genetically transmitted disorders as an important development. There is no evidence that that research could not have been carried out on tissue from babies who, unfortunately, were stillborn or on tissue from naturally aborted foetuses, without the breeding of embryos on which to make experiments.

Ms. Harman: The clear view of people who are engaged in research is that it simply would not be possible to make advances in our understanding of genetically transmitted disorders or to further the treatment of infertility in the way that the hon. Lady suggests. It is wrong to suggest that there is a hidden agenda and that researchers are saying that advances could not be made without human embryology when they could be. There is a clear consensus in the research and medical community that such research would not be possible without the use of human embryos. There are a few people on the margins who believe that it would be possible, but they do not carry their colleagues with them.
Those of us who support the programme for improving treatment for infertility and the programme for discovering more about genetic disorders would not be prepared to sacrifice the great advances on the basis that other methods might be possible. There is no evidence to support that view. I have led the hon. Member for Lancaster (Dame. E. Kellett-Bowman) astray by raising the principles of the 1990 Act. I am sure that you, Mr. Deputy Speaker, would say that she and I were out of order for raising the matter.
I take this opportunity to congratulate the Human Fertilisation and Embryology Authority on its work, which has been well described in its first annual report. I


am glad to have the opportunity to draw the attention of the House to that report. It is extremely well laid out and informative. It contains much information that professionals and those who may be embarking on infertility treatment may want to see. It is especially important that the report is accessible to the public, because many people who are embarking on infertility treatment feel that they are vulnerable to the blandishments of the private sector about what they could be offered if only they would hand over their money.
The authority will have an increasingly important role to play in providing people who have been offered all sorts of services in the private sector, and for whom all sorts of claims are being made, with an opportunity to consult it. People will have an official body with whom they can discuss the situation in practice. The authority says that one of its responsibilities is
giving information and advice to donors and prospective donors, to people seeking treatment or storage, or to people considering whether to do so.
I congratulate the authority on its excellent report. What help will the Minister's Department give to ensure that it is widely circulated among the medical profession and people who may want to look at it? My only minor criticism is that the report does not contain the authority's phone number or address. Many people reading the report and seeing the pictures of all those nice people working in the authority will want to ring them up or write to them for further information. Members of Parliament receive many reports and most of them are unreadable, but this is a good example and the authority has obviously done important work.
Human embryology is a rapidly changing field. When we discussed the parent Act, it was impossible to predict the problems that would emerge, which is why it is useful for the authority to identify the problems and discuss them openly in consultation. One issue flagged up was whether the success rates of different clinics should be published. It is important that that is discussed further and I look forward to seeing what the authority decides. Where the authority can iron out problems, we can be confident that it will do so. Its report identifies a problem with the confidentiality clauses in the Act which it cannot sort out by guidance or in any other way, which is why we are required to legislate.
We are dealing only with the extent of criminal law in this matter. Clearly, no one wants the criminal law to extend to such a degree that criminal sanctions could apply to the passing of information between doctors in the interests of patients. Doctors should not face disciplinary charges for seeking to provide information relating to treatment that is being questioned. The Bill should not change the general duty of confidence which doctors owe their patients. General practitioners have no criminal sanctions hanging over their heads if they provide information, but we all know and expect them not to do that. So we can reassure people that the Bill deals simply with the extent of the criminal law and the normal expectation of confidence between doctor and patient would hold true.
I expect that, if that professional duty of confidence were breached, it would be monitored by the General

Medical Council, so although the criminal law will be withdrawn slightly from that area, people's eyes will not be taken off it.
I hope that the fact that we are considering the Bill will encourage those who have doubts that, once it is enacted, everybody will forget about it and get on with what they felt was necessary and expedient at the time. The Bill shows that there is an expectation that the letter of the law will be obeyed, even if it makes no sense. We must change the letter of the law, because we do not want practices to develop outside the law. I hope that the fact that we have returned to consider this issue today and change the legislation will encourage those who are worried that, when people are given an inch, they will take a mile.
I thank the Minister for his clear introduction of the Bill. We recognise that we need the legislation and shall support it. I hope that he will deal with the points that I have raised.

Dame Jill Knight: It is strange that, although we have been debating this small Bill for about half an hour, no one so far has mentioned the children born as a result of this so-called scientific advance. Since the introduction of the parent Act, some hon. Members on both sides of the House have been concerned about the position of the child.
Will my hon. Friend the Minister say clearly whether the Bill improves or changes the position of those children? When children are born naturally and normally, possibly as the result of a brief affair. it may not be possible to find out health details of the parents, particularly the father. A child may have only one parent—a mother—and if she does not know the child's father well, the child may never know those health details.
We are considering the position of children who have been deliberately brought into the world by a scientific procedure. Some of us believe that that puts a special responsibility on the law, and on the medical profession which has brought the child into the world through somewhat unusual and unnatural means. If a child is adopted, the law gives it a right of access to information. It is often important for doctors to know, for instance, whether there is a family history of heart disease or some other health problem; it is much easier to treat a patient if the parental background is known.
It is less than fair to a child born deliberately in that way to withhold from the child information which is on file and known.
If an adopted child can have access to such information, those children should have the same right. Few people will speak up for children born as a result of such procedures, but this is an occasion on which to do so, because we want the Bill to give those children a better deal than they have had hitherto.
During the Committee stage of the parent Act, I sought to have the same conditions apply to those children as apply to adopted children. In law, it is absolutely clear that the interests of the child are paramount, but in these circumstances the interests of the child are not paramount but secondary to the interests of the mother or father. In many cases where children are born as a result of this procedure, the father and mother will be known—although the procedure is unusual, they will be the genuine father and mother—but I am talking about the many


children born as a result of the procedure where the father is not known. That is to say, he may not be known to the mother, but he will certainly he known to those who keep the hospital records. It is in that narrow context that I wish to speak up once again for the rights of children who come into the world as a result of procedures that we in the House have, rightly or wrongly, blessed.

Mr. Dafydd Wigley: I am glad to support the Bill. Many of us present today were involved in the protracted and sometimes heated debates on the original Act. Although we may have had differences of opinion about the original Act, I suspect that there is more agreement on the Bill's provisions, which meet some of the weaknesses that have become apparent in the original legislation. We are debating narrow points, not the broad issue covered by the original Act.
There are two reasons for welcoming the relaxation of the provisions. First, it is important to establish communications between clinicians. I accept the argument of the hon. Member for Birmingham, Edgbaston (Dame J. Knight), although I take a different view from her on the general issue. We must strike a balance between the different interests—including those of the child that we must safeguard.
There are times when there should be better communication between clinicians than is allowed under the narrow interpretation of the original legislation. In an attempt to protect the confidentiality of those receiving treatment to assist conception, the original Act unwittingly outlawed the direct communication between doctors which can be necessary in clinical emergencies.
For example, a rare complication which can occur in the ovulatory stimulation preceding in vitro fertilisation can result in collapse. At present, if a patient collapses in the street, the licensed IVF centre could be barred from informing the casualty department of the hospital where the patient is taken of the ovulatory stimulation treatment. That problem must be addressed and overcome. It is in the interests of the patient and everyone else that legislation should allow prompt and appropriate medical treatment in such circumstances, even though they are rare.
Legislative changes are also needed in respect of legal defence. One of the unintended consequences of the original Act was that it could deprive licensed practitioners of the ability to defend themselves in legal proceedings. Clinicians who provide such treatment may be sued for negligence and may be unable to obtain legal advice or representation, or submit a defence in a court of law without the risk of prosecution under the rules of confidentiality. The original legislation was not intended to create such circumstances.
Whatever our far-reaching differences over the original legislation, we should secure as much agreement in this House on the objective of this limited Bill as was achieved in another Chamber. I hope that we can make rapid progress.

Mr. David Wilshire: I have waited just over five years to prove to the House that I can voluntarily make a short speech, so I shall try not to speak for too

long. My interest in the Bill arises from the fact that I too, served in Committee in 1990 and have followed subsequent developments with considerable interest.
I support the Bill and am delighted that the Government have realised that more people need to know about the treatment—a battle that I fought and lost in 1990. I have only one reservation about the Bill: it does not go far enough. That is why I have tabled amendments, but I shall leave my comments on them until the appropriate time.
I remain as supportive of research and treatment now as I was in 1990, and I have no quarrel with the principle. However, I will not adopt the approach of the hon. Member for Peckham (Ms. Harman) and risk reopening the debate. Now, as then, the strands of support and opposition for the legislation go backwards and forwards across the House as the debate continues. Like the hon. Member for Peckham, I am delighted that experience has shown that the 1990 Act appears to be working well. I hope that it will continue to do so.

Ms. Liz Lynne: I endorse what has been said and I approve of the Act, but I have one or two worries about the Bill. Will there be any kind of monitoring? Can the Minister assure us that if the rules are relaxed the operation of the Bill will be monitored? Perhaps in two years' time there could he a review of all the law on the subject.

Dame Elaine Kellett-Bowman: The 1990 Act is a bad Act and it is not surprising that it has caused trouble. If the opening speech of my hon. Friend the Minister is to be believed, it may cause further trouble, as the matter has been left open.
I strongly oppose what is inappropriately known as the parent Act—the Human Fertilisation and Embryology Act 1990—because I believe that life begins at conception and is sacred. That is why I have consistently opposed abortion, and continue to do so.
I do not oppose—indeed, I support—in vitro fertilisation where the embryo is fertilised by the patient's husband and then reimplanted in the womb, but it is absolutely unforgivable to breed embryos for the purpose of experimentation. As I said to the hon. Member for Peckham (Ms. Harman), sadly there is quite enough foetal material created by accident—by spontaneous abortions and stillbirths—to make it unnecessary to experiment on live foetuses.
The Bill slightly improves an appallingly bad Act. It would improve it still further if the remarks of my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) were taken up, her amendment accepted and more consideration given to the children.

Mrs. Ann Winterton: As hon. Members may imagine, any legislation containing the phrase "human fertilisation and embryology" conjures up for me painful memories of the passage of the original Act bearing that name. The nights of 23 and 24 April 1990 will go down in the history of the House as a time when some of the most momentous decisions affecting human life were taken.
On 23 April, hon. Members decided to allow research on embryonic human life that involved destruction of that life. On 24 April, the House decided to change the law on abortion to allow the termination of the life of an unborn child up to birth. Those of us who talked then of abortion up to birth were accused of scaremongering. However, a parliamentary written answer in column 437 of Hansard on 29 June states that the number of abortions after 24 weeks has doubled since the Act came into force, and abortions have taken place up to 36 weeks. As someone who has had the privilege of seeing the scanned pictures of her grandchildren at about 16 weeks, I cannot imagine how abortions could be done at 36 weeks in a civilised country, unless there was a good reason such as the mother's life being in danger, which is rare.
I have deliberately strayed from the Bill to stress the momentous decisions that are being taken under the original Act and the fact that we are already reaping the results of the seeds that we sowed two years ago. I fully accept that the Bill is a technical measure. I cannot recall seeing a Bill of so few pages that was more complicated than this one. I do not object to the Bill's principle: to sort out some of the problems relating to the disclosure of information. I understand that, as the Minister and the hon. Member for Caernarfon (Mr. Wigley) said, a woman's health may be put at risk because the existing Act prevents some information being passed on to those treating her.
I have no desire to stand in the way of such a proposal. However, I should like to highlight two matters. First, why is the Bill so technical? I think that there is a simple reason. The 1990 Act allowed treatment involving the donation of egg and sperm. It would be quite legal under that Act for a man to donate sperm, a woman to donate an egg, for fertilisation to take place in the laboratory and for the resulting egg to be implanted in a second woman who would carry a baby and eventually pass that child to other parents.
Although that is an extreme case, once we allow life to be created by other than natural means and, in particular, provide for the donation of gametes, we inevitably bring on ourselves a whole range of consequences in relation to what information different people can have. It is a very sensitive matter for individuals to receive the kind of treatments that are allowed under the 1990 Act. Having decided to go down that road, we have brought on ourselves the need to devise complicated legislation. The Bill is a warning to us all of the implications of tampering with the natural means of reproduction.
The other matter that I want to highlight also concerns my hon. Friends the Member for Spelthorne (Mr. Wilshire) and for Birmingham, Edgbaston, (Dame J. Knight). It is that the Bill makes no mention of disclosing information to the one group of people most affected by treatment—children born as a result of licensed treatment. That is a sad omission, and I am surprised that the Government have not said anything about it throughout the passage of the Bill. I hope that the Minister will clarify the Government's position when we discuss the matter in Committee.

Mr. Peter Thurnham: I congratulate the Minister on this necessary Bill. It will correct a technical defect, of which we were not aware when the original Bill was passed. Events since the passing of the 1990 Act have proved its importance and success. I pay tribute to the British doctors who have made advances even greater than any that we expected at the time. The hon. Member for Peckham (Ms. Harman) spoke about that. Those advances are attributed to British scientists, who lead the world, and they would not have been possible without the freedom given by the Act. My hon. Friends the Members for Lancaster (Dame. E. Kellett-Bowman) and for Congleton (Mrs. Winterton) who opposed the Act should visit Hampstead hospital to see the work carried out by Dr. Bob Winston to help couples who suffer from genetic disorders and give them the chance to have a healthy child.
One of the disturbing features about Enoch Powell's opposition to such legislation in the 1983 Parliament was his preparedness to sacrifice the interests of couples who suffer from genetic disorders in the name of fears that have proved groundless. The Act paved the way for Britain to continue to lead the world, and set an example for legislation and for science.
Some doctors have spoken to me about their concerns over the defects in the 1990 Act. I am glad that the Government have not hesitated to introduce the Bill and to make provision through regulations for changes that might be required. We do not need to concern ourselves with any other corrections to the Act. It is right to maintain the anonymity of donors, an issue that is addressed by an amendment. I agree with the hon. Member for Peckham, who spoke about controlling the costs of the authority. Everybody was dissatisfied with the workings of the 1990 Act.

Mr. Sackville: With the leave of the House, I should like to respond to the points made by hon. Members. I thank all those who have taken part, especially the hon. Members for Peckham (Ms. Harman) and for Edinburgh, Leith (Mr. Chisholm). The hon. Lady spoke about the principle of the Bill and the availability of infertility services, especially in vitro fertilisation. We have always made it clear that purchasing authorities, the district health authorities, have to decide, in the light of their knowledge of local priorities and needs, what treatment to provide. That is the current situation.
I thank the hon. Lady for her congratulations to the authority, which I know it will welcome. She is probably unaware of the fact that I spoke at the authority's first conference recently, on the day that the annual report was published. I shall certainly raise with the authority the issue of distribution. The authority can be contacted at Paxton house, 30 Artillery lane, London E1 7LS.
My hon. Friends the Members for Birmingham, Edgbaston (Dame J. Knight) and for Congleton (Mrs. Winterton) spoke about the position of the child. The Bill does not change in any way the right to information of a child born as a result of treatment. It is limited to narrow circumstances, such as—

Mrs. Ann Winterton: Surely the crux of the matter is that an adopted child has the right to know its natural


parents and its background, for reasons of health if for no other. Why have the Government not seen fit to do the decent thing and allow children born by artificial means to have the same rights?

Mr. Sackville: That touches on the wider issue of comparisons between adoption law and the Bill's provisions. As my hon. Friend knows, the original Act left a regulation-making power, so that Parliament could later bring in rights to information on, for example, the health of genetic parents. The matter may be raised later in the Bill's passage.

Dame Jill Knight: Would not the Bill be a perfect vehicle for doing exactly that? The Minister said that there should be no amendments or improvements and then he said that the matter could be raised later. Is there a chink of light there?

Mr. Sackville: As I said, legislation allows for such regulations, but they must be discussed thoughtfully and at length. There are considerable ramifications attached to any change. Perhaps we can discuss that later.
The hon. Member for Caernarfon (Mr. Wigley) has taken a great interest in the subject. I am grateful for the benefit of his expertise and his welcome for the Bill. My hon. Friend the Member for Spelthorne (Mr. Wilshire), another leading expert on the subject—I have read some of his previous contributions—welcomed the Bill.

Mr. Wilshire: I am always anxious that Hansard should be accurate. I am flattered to be called an expert. I might be an interested layman, but I would not lay claim to being an expert.

Mr. Sackville: The hon. Member for Rochdale (Ms. Lynne) referred to monitoring. As the hon. Lady knows, the Human Fertilisation and Embryology Authority has statutory duties to monitor all the work and will deal with any new matters of concern in its annual report. If the hon. Lady wishes to contact me on any particular, my door is open. We look to the authority to monitor all the work and to be responsible for any changes and advances in techniques that may take place.
I am glad that my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) welcomed the Bill in principle despite her considerable doubts about the embryology aspects, of which we are aware. I am glad to hear that she approves of the principle of in vitro fertilisation as a method of fertility treatment.
Lastly, I welcome the remarks made by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) who has taken a great interest in the subject. I hope that his interest will continue. His contributions are always welcome.
The Bill seeks to relax the impact of section 35(5) of the 1990 Act without departing from the general principle that the person to whom the information relates should retain as much control over the dissemination of that information as possible. It seeks to redress the balance between necessary and appropriate access to identifying information and the sensitivities and wishes of the individual concerned.

Mr. Thurnham: Is my hon. Friend aware of some of the advances that have been made at St. Mary's hospital, Manchester? I hope that he will have an opportunity to visit that hospital to see the work done there by Dr. Brian

Lieberman, among others, which shows that advances arc being made not only in London but elsewhere in the country, particularly in the north-west.

Mr. Sackville: I am aware of Dr. Lieberman's work. He is one of the leaders in the field and I hope that I will be able to visit in the future.
The Bill will benefit patients and clinicians alike. It is a reasonable and much-needed measure, as many who have contributed to the debate have said. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Nicholas Baker.]

Bill immediately considered in Committee.

Clause 1

RELAXATION OF SECTION 33(5) OF THE HUMAN FERTILISATION AND EMBRYOLOGY ACT 1990

Dame Jill Knight: I beg to move amendment No. 1, in page 1. line 21, leave out 'or'.

The Chairman of Ways and Means (Mr. Michael Morris): With this it will be convenient to take amendment No. 2, in page 1, line 23, at end insert
',or
(i) to a person who was born as a result of any treatment covered by a licence.'.

Mr. Dafydd Wigley: On a point of order, Mr. Morris. I do not raise thisin a disruptive manner, and it can possibly be dealt with by a manuscript amendment. Amendment No. I seeks to leave out "or" in line 21, but the word "or" appears twice in that line.

The Chairman: I am grateful to the hon. Gentleman. The word "second" should be included in the amendment.

Dame Jill Knight: As I have already spoken, I have no intention of delaying the House. I simply give my hon. Friend the Minister notice that if what we are doing today merely benefits the patients, and if there is a thus far undiscovered loophole somewhere which may benefit the children, we shall seek to find that loophole and to use it because the rights of the children are clear in our minds.

Mr. David Wilshire: I apologise for the last-minute decision to ask my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) to move the amendment standing in my name. For the record, it should be made clear that my attention was drawn to the fact that in "Guidance to Ministers", now a public document, it states that Parliamentary Private Secretaries cannot move amendments to Government Bills. I apologise for any confusion which may have arisen. I can, however, speak to the amendments and I intend to do so.
The amendments are all about who a person is and whether or not he or she has a right to know that. If the genetic parents are different from one's social parents, both sets of parents are an essential part of the child. That is an issue which I and a number of my hon. Friends raised first in 1990, and I make no apology for raising it again. Now, as then, the matter is one of conscience. These are matters of deeply held personal belief. The amendments are not anti-Government, aimed at driving a hole in a


central plank of Government policy, and I hope that now, as in 1990, we can approach the debate on a non-party-political basis.
The issue which was fundamental in 1990 and which we are discussing now is simply whether, if you, Mr. Morris, or I or anyone else were born as a result of egg or sperm donation, we ought to have the right to know who the donor or donors were. Let us be clear about this. Over the years, as treatment becomes more and more successful, more than a few people will discover that they were born as a result of such treatment. It may be that their social parents tell them. I hope that they will. It may be that people will find out by accident. With all the good will in the world, with all the safeguards and all the criminal sanctions, people will find out. Therefore, we must have an answer to whether people who discover that they have been born as a result of treatment have the right to know who the donors were. My view remains as it was in 1990—that people have the right to know.
From time to time, people will realise that they were born as a result of treatment and some of them will take steps to try to find out who the donors were. They will quickly discover that others hold files containing the answer to the question that they are asking. They will readily realise that someone somewhere knows the identity of their genetic parents—information which they will be refused. They will not be allowed to know their genetic origins. If that happened to me, my response would be: how dare this system, or any system, refuse to tell me what others know about my basic origins?
My conviction is deeply held and subjective, but there is another, calmer justification for the approach that I ask the Government to consider carefully. Refusing such information to people born as a result of treatment flies in the face of the spirit of the age. A short list of recent legislation shows that we have discussed access to information and have legislated for the rights of people, particularly in areas of local government, to know certain things that they did not know before. The Data Protection Act 1984 gave people the right to know what is held on file about them. Patients have the right to look at their medical records. Dare I suggest that even the citizens charter is all about the rights of the individual? All those matters, and many more, address the issue of people's rights to know all that there is to know about themselves.
Then there is the argument put forward by my hon. Friends the Members for Edgbaston and for Congleton (Mrs. Winterton) of the precedent set by adopted children having the right to know who their parents are. I accept that few of them use it, but some do. To the best of my knowledge—I am happy to be corrected—there is no evidence that an adopted child's right to know its parents has done any harm.
It would be foolish of me not to acknowledge the case against. It is argued that it would harm a child to know the identity of its genetic parents, but the adoptive child experience suggests that that is not so. Even if one accepts that argument, the truth will out sooner or later. Some people would find out, despite all efforts to prevent them from doing so. The only way to prevent the alleged harm would be to end all such treatment—and I would not support that.
Another argument is that, if the child were given the right to know, the supply of donors would end, but there is evidence to the contrary. I cite the experience of King's College hospital, London, based on 100 people who inquired whether they could donate either eggs or sperm. When the 30 who were accepted as donors were asked whether or not they were willing to have their identities revealed, 12 said yes, eight said that they wanted to give the matter further thought, and only 10 said no. Only one third said that disclosure would put them off helping in that way.
Even if the right to know served to reduce or to eliminate the supply of donors, that is not a good reason to block disclosure. If those willing to donate are so worried about their identity becoming known to the child. one questions their reasons for volunteering. Do they simply want the money, but not the responsibility? Do they want to wash their hands of their participation? Are they ashamed of their involvement, or afraid of being embarrassed 20 years later by someone knocking on their door and saying, "Hi, mum," or "Hi, dad"? If donors cannot entertain that possibility, they should not donate. The creation of life and the principle that I support carry responsibilities. Those who cannot face up to those responsibilities should not become involved.

Mr. Wigley: The hon. Gentleman used the word "eliminate". Would he really be prepared to see the ending of such treatment as a consequence of the amendment?

Mr. Wilshire: I most certainly would. If people are not willing to take responsibility and to participate in the full knowledge of the implications and of the effect on the child, that is the price that we would have to pay. We should not cover up the truth or deny an individual his or her fundamental rights as a matter of convenience or to ensure the supply of donors. I would regret that consequence, but we must confront the reality of the argument.
Another argument made against disclosure is that prospective social parents would object and that, if the child could discover the identity of his genetic parents, fewer people would seek treatment. I would be desperately sorry if we started to close the door on the people who seek such help, but if would-be social parents cannot face their children knowing the truth, what are they ashamed of? I cannot think of any better definition of the love for a child or of wanting a child than that a couple should go to such extremes to have one. There is no reason why any person seeking treatment should worry about disclosure. It should be a matter of pride and commitment that one has allowed one's child to the identity of his or her genetic parents.
Sooner or later, and despite the wishes of their social parents, children will discover the identity of their genetic parents. If the social parents do not tell their children the truth, the children will come to realise that they have been living a lie. That would do more harm than making it impossible to attract donors or having fewer people receiving treatment.
Who matters most? On Second Reading my hon. Friend the Minister said that the original Bill intended to give patients maximum control. The House will understand that it is not just a question of the parents. At least three groups of people are involved—donors, treatment seekers, and the resulting children. They all


matter. We cannot exclude any one of them. I argue now, as I did in 1990, that we should not seek to deny the rights and the interests of the resulting child.
We cannot duck the issue by saying, "It is better to leave matters as they are; the system works well." Donors have a choice: either they donate or they do not. Patients have a choice: either they seek treatment or they do not. The resulting child has no choice. He or she comes into this world as a result of the decisions of others. If I must choose between those who have a choice and the child who does not, I will come down on the side of the child and do my level best to defend it.
I suspect that it is not a question of the Government refusing to accept the amendments but of their being unable to do so. The amendments were not drafted by lawyers, and I shudder to think what complications they might create. I have made the point that I am not an expert, and I cannot profess to have played a part in drafting something that is legally watertight.
I shall be grateful if my hon. Friend the Minister will clarify one point, so that we may be absolutely clear. Would the regulations allow the Government, after mature thought and having taken the advice of lawyers, to make it possible for children to learn the identity of their genetic parents? If so, the argument of principle has been won and I can leave for my summer holidays deeply satisfied and very reassured. The Government may not like the arguments, however, and they may prefer to come down on the side of withholding information. I can only say that that is democracy.
Democracy is all very well, but this issue will not go away. Those who raise it whenever an excuse is made are labelled the awkward squad on the Government Back Benches. We are reasonable people, and we understand the score, but we shall take every opportunity to pursue the matter. I suspect, however, that sooner rather than later our battle will be joined for real by a child who demands to know its genetic origins. When that happens, it will not be the awkward squad but the people of this country and the media who will be asking how the system, under whichever Government, the medical profession, and those who speak in the name of science and progress can dare to deny a child his or her absolute right to know his or her origins. That will ultimately force the Government of the day to act, and the sooner that happens, the better.

Mrs. Ann Winterton: It is appropriate that one of the awkward squad should have caught your eye, Mr. Lofthouse, and follow in the footsteps of my hon. Friend the Member for Spelthorne (Mr. Wilshire), who made a powerful and impassioned speech. It is extraordinary in this day and age that, on a non-party political issue of conscience and belief, a Parliamentary Private Secretary should be debarred from tabling an amendment. I was delighted to put my name to an amendment tabled by my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) to deal with the problem, because this small amendment again focuses attention on the group of people most affected by the treatment provided under the 1990 Act.
My hon. Friend the Member for Spelthorne was very active during the passage of that legislation, especially in Committee. He succeeded, for instance, in putting a child's need for a father on the statute book. He worked extremely hard to do that, and he should be congratulated on his tenacity.
5.30 pm
Children born as a result of in vitro fertilisation, artificial insemination or egg donation are not protected in the same way as other children, and many of us want that to be put right. As the 1990 Act currently stands, individuals born as a result of treatment can discover from the Human Fertilisation and Embryology Authority only whether they were indeed born as a result of it, and whether a named person may be related to them in some way. No information that might identify the true genetic parents of such individuals can be released.
As has already been shown, the Bill makes no change in those arrangements. Instead, it extends the number of people who can have access to information about those involved in treatment, whether they are donors or recipients. It allows information to be provided in court proceedings and it allows doctors involved in the treatment to be provided with such information. Any doctor is allowed access to identifying information, as are servants of the authority, but children horn as a result of fertility treatment are not allowed such access. My hon. Friend's amendment seeks to rectify that omission; as I said earlier to my hon. Friend the Minister, for some years adopted children have been able, at the appropriate time, to try to discover the identity of their true parents.
As my hon. Friend the Member for Spelthorne said many times, this is one of those issues that will not go away. It will be raised in the House of Commons time and again, because an injustice is being perpetrated. That injustice should be put right, and the sooner the Government recognise it, the better.
During the Committee stage of the 1990 Act, the then Minister of State for Health—now Secretary of State for Health—said that the Government intended to keep under review the kind of information that should be given to individuals born as a result of treatment. She stressed that regulations could be made under section 31 of the Act to allow identifying information to be provided. Two years have passed. The Human Fertilisation and Embryology Authority has been established—we have referred to its report today—yet no word has been forthcoming about regulations on the matter, or even about consultation.
I hope that the Minister will tell us precisely what the Government believe and will assure us that they have not forgotten that many people—both inside and outside the House of Commons—are anxious that children should not grow up in the dark, but should be able to obtain appropriate information about their origins. Children who are born as a result of fertility treatment are treated as second-class citizens in comparison with adopted children and those who are born to their parents in the natural way.
I am happy to support my hon. Friend's amendment.

Mr. John Bowis: Let me complete the process that began with the great, proceeded to what we now know as the expert and then reached the awkward squad. I am not sure where that leaves me in the resulting Conservative quartet, but I am happy to be categorised if my hon. Friends insist on it.
My hon. Friend the Member for Congleton (Mrs. Winterton) need not fear for my hon. Friend the Member for Spelthorne (Mr. Wilshire). We are seeking not to introduce a measure that is opposed to Government policy but to clarify that policy and, indeed, to extend


Government commitments in the earlier legislation. It was said then that the matter would be kept under review; we are seeking that review now.
I want to highlight the practical realities to which the amendment relates. It is not simply a case of "Wouldn't it be nice to know where I came from?", although that may justify the provision of a right to information. My hon. Friend the Member for Spelthorne used the phrase "living a lie". We must be careful about using such terms in this place; I think that my hon. Friend meant "living a life in which it is impossible to be truthful"—impossible, that is, if the person concerned does not know the facts. That is what concerns me. If a person does not have the right to know his parents, who created him—even if he was born from the womb of a third party—he will not be able to tell the truth about his origins.
Decades after his birth, that person may suffer from a disease that requires the doctors to know his medical history. If he is asked whether there is a record of heart disease in his family, all that he will be able to say is, "I do not know"—or, worse, he may assume that the people who brought him up are blood relations, and give a false picture on that basis.
The individual has a right not just to know, but to be told. If, long after his birth, one of his real parents was found to have contracted a disease such as AIDS, how would it be possible to ensure that he was aware of it? The disease could have passed into the next generation through the bloodstream, unbeknown to the real parents, the adoptive parents and the child. The child would then be unable to protect himself, because he would have no right to be told of the development in his blood line.
There is another consideration. In a sense, it is much less serious, but it might be important to a young adult who took out insurance against, for instance, having twins. Insurance companies providing such cover must be told of the family history and informed whether twins have been produced regularly. The person whom we are discussing would not know that, or might think that he knew, although he would be thinking of the wrong family. He would be unable to tell the truth, or, at best, he would be discriminated against: if he could only say, "I do not know," he would be excluded from insurance benefit.
I want such children to be able to live the truth rather than a lie. I want them to live without the fear that something unknown to them may have happened and to live without discrimination. For those reasons, I hope that my hon. Friend the Minister will give careful consideration to the reasoned arguments presented by Conservative Members. They have a purpose beyond the desirability of knowing the facts: they relate to problems that will face people in later life if they are deprived of the right to know.

Ms. Harriet Harman: May I say to those on the Tory Back Benches who describe themselves as the awkward squad that we are not prepared to accept the implication that they care about the children and that we care only about the parents. That is unacceptable. We have to look at the question from all sides.

Mr. Wilshire: If the hon. Lady drew that implication from what I said, I apologise to her. When I spoke in the debate, that point was the furthest from my mind.

Ms. Harman: I am grateful to the hon. Gentleman for his clarification. We can therefore proceed on the basis that we all have an equal interest in the future of children who are born in these circumstances and that the hon. Gentleman and his colleagues are concerned about the position in which parents find themselves.
On the anonymity of donors, the hon. Member for Spelthorne (Mr. Wilshire) referred to what I believe to be the key issue: would donors come forward if they felt that at a later date somebody would come knocking on their door and say, "Hi, Dad, I'm your son"? We do not want to jeopardise the artificial insemination by donor programme because people are worried that if they donate sperm they will be identified at a later date.
The hon. Member for Spelthorne said, in a kind of menacing way, "We'll keep bringing up this issue and bringing it back to the House of Commons." Of course it needs to be raised regularly. I do not doubt that the Government want it to be discussed regularly. The authority says in its report that it wants the issue to be discussed. The awkward squad need not therefore feel that they are beleaguered champions and that, were it not for them, nobody else would raise the issue. The authority highlights on page 27 of its report the fact that the Government are concerned about the issue. It also voices its own concern.
I hope that there will be more research into whether it might be possible to identify donors without deterring them from becoming donors. If the Government get it wrong and require donors to be prepared to be identified and the result is that donors do not come forward, an informal process will come into existence. It is easy to practise artificial insemination by donor. The awkward squad might not know that, but in fact it is very easy and——

Mrs. Ann Winterton: What the hon. Lady says is an insult to anybody's intelligence. First and foremost, not all my hon. Friends are members of the awkward squad. I am, unashamedly, a member of the awkward squad and I shall continue to be a member of it for as long as the good electors of Congleton are prepared to return me to this place to be as bloody-minded as I want to be.
Nobody believes what the hon. Lady says about her interest in children, because she supports abortion up to birth. No one who does that, for social reasons, can have a genuine interest in children. Nevertheless, some of my hon. Friends agree with the hon. Lady and not with me.
I am the first to admit that a very delicate and sensitive balance has to be achieved when it comes to the rights of a child who is born as a result of one of the infertility processes and the rights of a child who is conceived in the ordinary way. The hon. Lady has not yet, however, mentioned the rights of the child. She has referred to the rights of the donor, the feelings of the donor and the feelings of the parents. Has the child no rights at all?

Ms. Harman: When I said that I was not prepared to accept what had been implied by at least two of the self-styled members of the Tory Back-Bench awkward squad—that I am concerned only about the interests of the parents and that they are the custodians of the true interests of the child—the hon. Member for Spelthorne got up and asked me how on earth I could have got that idea. We know the answer now from the hon. Member for Congleton (Mrs. Winterton). I shall not respond, however,


to her point about abortion. I want to deal with my concerns about the amendment. [Interruption.] I am afraid that I missed the point of the heckling by Conservative Members, so I shall proceed with my speech.
If the Government require donors to be prepared to be identified after they have donated sperm and the result is that people do not come forward to donate sperm, that will not kill the demand for artificial insemination by donors. It will simply drive it away from medical supervision. It will result in informal artificial insemination by donor. That will he far more risky when it comes to the health of the child. It is far better for artificial insemination by donor to be carried out under medical supervision.
5.45 pm
I hope that the debate about identification of donors will proceed. I am confident that it will. I hope, too, that there will be more research. However, this is a complex issue and, when we address it, we have to be sophisticated and intelligent. If we do not talk in terms of tabloid headlines, we may make progress. I take it that the hon. Member for Spelthorne intends to withdraw the amendment, but I look forward to debating the issue on future occasions. I am sure that I shall agree with what the Minister is about to say.

The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville): That may be something that I shall not hear very often, Mr. Lofthouse, so I shall enjoy it.
This extremely lively debate has highlighted many of the issues that surround this extraordinarily difficult topic. The amendment, so charmingly moved by my hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight), was developed by my hon. Friend the Member for Spelthorne (Mr. Wilshire). The arguments that he put on both sides amounted to a veritable tour de force, although he put the arguments on one side more effectively, perhaps, than on the other. My hon. Friend asked whether the Bill provides for the formulation of regulations to achieve what he wants. It does not do so. However, the 1900 Act makes provision for a regulation-making power. That provision is still available.
My hon. Friend the Member for Battersea (Mr. Bowis) referred to a number of ethical concerns. All donors are screened for HIV. As my hon. Friend may be aware, no one with a history of genetic disease would easily be accepted as a donor of gametes.

Mr. Bowis: I am absolutely aware of that. My hon. Friend will also be aware that HIV could be contracted at a later stage, long after the donation had been made. It is at that stage that there appears to be no means of notifying the child, who might be affected through the bloodstream.

Mr. Sackville: I take that point.
We also heard from my hon. Friend the Member for Congleton (Mrs. Winterton). Her views are well known and she put them eloquently.
I was warned off mentioning any of the technical defects in the amendment, of which there are several. There are, however, substantial objections to it. The main one that springs to mind is that the 1990 Act already contains a provision that would allow part of what my hon. Friend the Member for Spelthorne wants to be brought into being. If any moves were to be made down this road, they would have to be considered carefully. They

would have to be the subject of wide consultation and debate in the House of Commons. Views on the subject differ widely.
My hon. Friend's amendment is defective in the sense that it appears to give clinicians the right to pass on this information. In effect, the HFEA would be charged with handling the information. Many other compromises could be considered along the route, such as the provision of information on physical characteristics, family background or whatever, stopping short of actual identification. All those matters would need to be debated at some length.
I do not believe that it would be easy to achieve a consensus. Perhaps that is why Parliament left the matter open, to be decided by affirmative resolution in the future. There are widely differing and passionately held views on both sides of the Committee, some of which have been aired today. In an ideal world, no child would be without an identifiable father or a chance to live in a proper family unit. We are all aware of that. In reality, there are infertile couples, and they have rights, too. It is thought by clinicians and many others that, if we were to identify donors, we would put enormous pressure on infertility treatment. That must be taken into account.
This is a difficult subject and I can only tell the Committee that it will be kept under review by the Government. I am aware of the passionately held feelings on the subject, but I do not believe that the amendment is the way forward. A more appropriate mechanism for disclosure of information already exists in the 1990 Act and, for that and other reasons, I cannot recommend to the Committee.

Dame Jill Knight: Many of us were a little disappointed to hear one or two of the remarks by the Minister, especially the fact that nothing in the Bill would improve the status of the child. That is a matter of great concern. While listening to the debate, I was thinking about the sort of people who would object to having it known that they had been involved in this procedure. We have already mentioned a man who might object to someone coming up to him and calling him dad. I suppose there is also the issue of a wealthy man who might be afraid that a child might at some point ask for a share of his money. I do not have any sympathy for a man who does not wish to be identified for that reason.
It is a matter of balance—the rights of the child as against the rights of the donors or mothers. I can understand, in certain circumstances, the feelings of a woman who might want to have a child in this way and have it remain a secret. However, I cannot entirely accept that her feelings are more important than the child's rights. There are some women who do not want to have a husband. I can understand that in some circumstances, but I cannot accept that such a woman's rights are greater than those of the child she wishes to bear. [Interruption.] Opposition Members seem to find amusing the idea that children have rights too.

Ms. Harman: Will the hon. Lady give way?

Dame Jill Knight: No, I will not.
In the light of what the Minister has said, we have no alternative but to withdraw the amendment, bearing in mind that he has said that he understands that this matter will come up again and can be rectified under existing law. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 1 and 2 ordered to stand part of the Bill.

Bill reported, without amendment; considered.

Bill read the Third time, and passed, without amendment.

Orders of the Day — Education (Assisted Places)

The Parliamentary Under-Secretary of State for Schools (Mr. Eric Forth): I beg to move,
That the draft Education (Assisted Places) (Amendment) Regulations 1992, which were laid before this House on 3rd July, be approved.
The draft regulations are quite specific in their purpose in that they amend the principal regulations, which are the Education (Assisted Places) Regulations 1989. The amending regulations provide for the uprating of the parental contribution tables which set out how much parents must pay towards their child's assisted place, together with certain other technical amendments.
As hon. Members will know, the assisted places scheme was established in 1981 for the prime purpose of opening up educational opportunities for able children from less well-off families. It provides their parents with assistance towards the fees at some of the best independent schools in the country. That assistance is on a sliding scale based on gross parental income, and the principal changes embodied in the amending regulations are concerned with the routine revision of those scales.
There are, of necessity, several other technical amendments in order to keep the definition of "total parental income" for the purposes of the scheme in line with tax legislation and to update the working of the regulations to reflect current practice and circumstances. I am sure that right hon. and hon. Members will find that the amendments that I shall describe are quite straightforward.
Regulation 1 of the draft regulations deals with citation, commencement, application and interpretation. The regulations are to come into force on 28 August 1992. Regulation 2 is a technical amendment, necessary to ensure that the assisted places regulations remain up to date in relation to those with refugee status.
Regulations 3 and 5 update the provisions of regulations 7 and 12 of the principal regulations. A school is prohibited from awarding an assisted place if the whole of the child's first year fees are required to be paid under a court order. Schools must also take into account fees required to be paid under a court order when assessing the amount of fee remission for existing assisted place pupils. The amendments will require the schools in such circumstances also to take into account fees required to be paid by virtue of a deed of separation and corrects an existing anomaly.
Regulation 4 increases the allowance made when calculating parents' total relevant income for each dependent child, other than the assisted place holder. The amount is raised from £1,065 to £1,105—by the same percentage which applies to the uprating of the parental contribution scales, to which I shall address myself in a moment. This allowance is helpful to parents with large families, and uprating it will ensure that their position is not worsened.
Regulation 6 is consequential on the Finance Act 1991. Relevant parental income for the purposes of the assisted places scheme is total taxable income, gross of all allowances. Each year we make any necessary amendments to nullify the effects of specific new allowances introduced in tax legislation to keep the definition of income constant for the purposes of determining income


under the scheme. This year the Inland Revenue has confirmed that sections 32 and 33 of the Finance Act 1991 provide for tax relief on the costs of vocational training. Therefore, a small technical amendment to remove the effect of such allowances is required.
I now come to the main purpose of setting the regulations before the House today. Regulation 7 sets out the income bands used for assessing parents' contributions towards fees. These bands have been uprated to take account of the movement in the retail price index to April this year—that is, by 4 per cent. The threshold at or below which parents pay nothing towards fees is raised from £8,714 to £9,056, with corresponding increases in the thresholds for higher percentage contributions from income. The effect of this amendment is that parents will not be asked to increase contributions above the rate of inflation; they will continue to contribute roughly the same proportion of their income as they did last year. I believe that the House will find this an equitable measure, taking into account the fact that, on average, parents in the scheme earn considerably less than the national average income.
Assistance under the scheme follows the principle that the lower the income is, the greater Government assistance should be. The threshold for full remission of fees, to which I have just referred, is set deliberately low so that the least well-off families benefit most. The scale then rises sharply so that better-off families get reduced assistance and finally no assistance. I believe that to be right and in keeping with the aims of the scheme; to open doors of opportunity to those who would otherwise never be able to contemplate paying fees.
Even so, participating schools have made representations to us that they should be allowed greater freedom in the use of their own scholarship and bursary funds for the benefit of assisted pupils. Under existing regulations, schools are effectively prohibited from using such funds to reduce the parental contribution to fees—for example, in cases of sudden hardship or where the school wishes to give a merit award or to retain a particularly promising pupil. Regulation 7 provides for parents' residual liability for fees to be reduced or extinguished by a bursary or scholarship awarded by the school in such cases, and we hope that this small amendment will enable schools to use scholarship funds in the most beneficial way and to have flexibility to assist those in most need of help if and when the need arises.
As we reiterated in our election manifesto, the Government believe firmly in the principle that parents in every part of the country should have access to the opportunities offered by a scheme such as this. The assisted places scheme is now in its 11th year. The Government have supported and will continue to support the scheme as part of our policy of widening educational choice and opportunity. With many parents throughout the country, we are immensely encouraged to see the successes—in music, the arts and sport, as well as in academic subjects—which assisted pupils have recorded. Over the years since this excellent scheme was introduced, more than 55,000 children have benefited from education at some of the best independent schools in the country. There are now more than 27,600 pupils in the scheme, well over a third of whom are enjoying totally free education at those schools.
The provisions and amendments that I have described are necessary technicalities to ensure the continued smooth

running of the assisted places scheme and to continue to provide for a realistic contribution both from the Government and from parents. I trust that they will find favour with hon. Members.

Ms. Hilary Armstrong: This is the fourth year in which I, on behalf of the official Opposition, have opposed such an order. In that spirit, I welcome the Minister to the debate. On each occasion, I have faced a different Minister, which says something about the short time that they have spent in education. I hope that the present Minister and other Education Ministers will stay longer, and that that will show the Government's determination to take education seriously and to recognise that it needs a little continuity and stability.

Mr. Forth: Perhaps the hon. Lady should tell the Prime Minister that.

Ms. Armstrong: I shall come to the Prime Minister later.
We oppose the order, once again, because it fails to meet the objectives that Ministers set when they introduced the scheme under the Education Act 1980. We oppose it because it does not ensure value for money and because it fails to apply the criteria established in the citizens and parents charter for this aspect of public spending. We oppose it because it prevents attention from being focused on improving the overall quality of work and on raising standards generally. And we oppose it mainly because it puts ideological dogma before educational opportunity and achievement.
In the parents charter, the Government state that standards will be raised by improving information on and inspection of schools. We had many debates on the philosophy which underlies that when we considered the Education (Amendment) Bill earlier this year, but, remarkably, the assumptions which underlie the order are that the brightest children, whom the scheme is supposed to support, will be excluded from those aims.
Unless the independent sector deals with special needs, it is excluded from the provisions of the parents charter. Despite the increasing amount of public money spent on the scheme, on which the Government based their education philosophy in their election manifesto, that sector is excluded. During the passage of the Education (Amendment) Bill, we moved amendments to make the inspection of and information on schools in the independent sector——

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. The hon. Lady is straying rather wide of the regulations, which apply to the financing of the scheme, as I am sure that she appreciates. It would be helpful if she would keep her remarks to the financing of the scheme.

Ms. Armstrong: I am trying to relate the principle of the assisted places scheme to expenditure. The order specifically increases expenditure, but I will try to ensure that I do not stray outside your instructions. You know, Mr. Deputy Speaker, that I would be the last person to seek to do that.
It is important that the Government's aims are examined by the Opposition. The Government are trying to get away with double standards, and it is the job of the Opposition to point out where double standards apply.
There is no accountability for expenditure on the assisted places scheme. There is no inspection of or information about independent schools and whether they provide the most effective education opportunities for children who benefit from or participate in the scheme. I am sure that the Minister would not expect me to speak without mentioning the inspectors' report on the education of very able children in maintained schools. The report says:
It should be possible to cater for the majority of very able pupils within the context of the normal school curriculum if proper consideration is given to their particular special needs and some flexibility is introduced into both organisational and teaching strategies … Evidence suggests that those schools which focus sharply on what very able pupils might reasonably achieve are likely to be more successful in improving the overall quality and raising standards generally.
We have contended for many years that it is the responsibility of the education system to raise standards generally and to open up opportunity for all children. The report makes it clear that one of the most effective ways of doing so is to teach very able children in normal schools. The Government are rejecting that idea through the underlying philosophy of the order and of the scheme to which the order grants money. The programme carries with it the assumption that adequate education for very able children can be achieved only by taking them out of the maintained system and putting them into the private sector. Her Majesty's inspectorate of schools does not agree, and nor do we: not only can the needs of the very able be catered for within the maintained sector, but the overall quality of work is thereby improved and standards generally are raised. That is what we are supposed to be trying to achieve.
The scheme also fails to secure value for money. There was something of a crisis following the order last year. A sum of money was granted and the Audit Commission was called in to examine how the money was being spent by the Department of Education and Science. In preparation for the citizens charter—which is why I consider this point to be relevant—the Audit Commission discovered that the assisted places scheme was about £3 million overspent, even though it was not achieving its target in terms of the numbers that the House had intended the money to cover. There was an overspend of about £3 million, and the Minister had to cap the amount of money that public or private schools were able to claim through the order.
Schools had been able to set their own fee limits and increase their fees without reference to Government. In the middle of last year, the Minister had to state that fees could be increased only by 12 per cent. I need hardly remind the House that the cap set for the maintained sector was substantially lower, at 7 per cent. Even though the cap was set at 12 per cent. in the independent sector—substantially higher than in the maintained sector—it had great difficulty in keeping to it and, indeed, some girls' public schools were increasing their fees by up to 15 per cent. or 18 per cent. and boys' schools by as much as 30 per cent. It is clear that the scheme does not offer value for

money. What does the Minister intend to do this year to ensure that the scheme does not run into similar problems? What level of increase will he set for fees?
All the research and HM inspectorate's report show that the assisted places scheme plays no part in raising overall standards or ensuring that the system for which the House is responsible is able to provide improvements. Research into the programme has shown forcefully that the scheme fails to secure the number of children from poor schools whom it was originally established to recruit. Yet, despite all the evidence from HM inspectorate and others, the Government continue and expand the scheme and put more money into it. One can only conclude that the Government do so because of ideological dogma.
These days, expert opinion in education does not seem to mean anything to the Government. Indeed, the Government seem to think that flying in the face of such opinion is somehow clever, and that the less anyone knows about education the better. I am afraid that we have seen some evidence of that from the Prime Minister in recent days.
I hope that Ministers will begin to deal with the facts, with the need to raise standards and to ensure that all our energy is committed to that aim rather than to narrow, divisive schemes fuelled only by ideological dogma.

Mr. Bob Dunn: I shall be brief. I enjoyed the style and elegance of the speech of the hon. Member for Durham, North-West (Ms. Armstrong), but it contained very little with which I could agree.
The Minister said that this is the 11th year of uprating under the regulations. For five of those years, I performed the ritual that he has performed so ably today. I do not accept the notions advanced by the hon. Member for Durham, North-West, for reasons that I have already stated. I welcome the changes in the regulations relating to the use of scholarships and bursaries because it is wise to enable schools to have greater flexibility in the application of their funds.
I listened with some interest to the hon. Lady's reference to Her Majesty's inspectorate's advice and its comments on the passage and work of the scheme. I have always disregarded that advice. I always thought that Her Majesty's inspectorate was a creature of the 1960s and, indeed, of the Labour party. Nothing it has ever said has given me any reason to change my mind.
The hon. Lady talked about children being "put into schools", as if there were a mechanism by which the state took hold of children from a variety of backgrounds and forced 55,000 people and the 27,000 currently benefiting from the scheme to enter good, well-respected private schools. In fact, it is the parents themselves who, for their children, elect to take advantage of the opportunities available in the private sector through the agency of the regulations.
I also welcome the uprating details, as they relate to the numbers of parents on low or benefit-related income. The scheme always aimed to give an opportunity to parents for whom the state and local comprehensive school were the only available choice. For that reason, the House should support the proposals.
The hon. Lady referred to an issue of which the Minister could perhaps take note for the future. Under the regulations, there is a strong case in time for widening the


application of choice to parents whose children perhaps do not have the same academic ability as their peers. The hon. Lady's point about special needs children should be considered. Why should the parents of special needs children be denied the same opportunity as parents with normal, mainstream, high calibre children? In that sense, the hon. Lady has a point. If her argument were accepted, perhaps her objection to the regulations would diminish.
The regulations are worthy of consideration on an annual basis because that gives us the opportunity to emphasise the philosophical divide between the Conservative and Labour Benches. The hon. Lady talked about compulsion, ideology and doctrinaire stances. I have never adopted a stance that was not ideological or doctrinaire because I pursue my beliefs. I share a philosophy. If I did not folow my philosophy, I would be on the Labour Benches, where philosophy, ideology and doctrine are now things of the past, according to the new-style Labour party.
I firmly believe in parental choice. I believe that parents who do not have the financial means of richer parents should have the same opportunities as richer parents to exercise choice for their children if they so desire. The point of the regulations is that they give parents the opportunity to choose. It is not an enforced choice—parents elect to send their children to private sector schools.
I congratulate my hon. Friend the Minister on his delivery today, and I wholly support the regulations, as amended.

Mr. Stephen Byers: I wish, first, to reply very quickly to the points that were made by the hon. Member for Dartford (Mr. Dunn). This scheme is not about parental choice; it is about schools choosing their pupils, which is exactly what happens when an application is made under the assisted places scheme. Often, a pupil has to sit an examination set by the school that his parents wish him to attend; thus it is the school that does the selecting. There is a political and philosophical difference between the Opposition and the Government. We believe that high-quality education opportunities should be available to all children, not just a minority. The regulations are another example of the way in which a minority of schoolchildren are given an advantage over the majority. It is for that very basic reason that we shall oppose the regulations.
The assisted places scheme has been in operation for more than a decade. Since 1981, £500 million of public money has been spent on it. At the time of its introduction, the Government's stated aim was very clear—to assist children from less well-off backgrounds to attend high-quality independent schools. I submit that, even in the Government's own terms, the scheme has been a failure. Do the children come from less well-off backgrounds? The Minister said that only one third qualified for full remission of fees. He could have gone further and told the House that more than one third of the parents receiving support under the regulations are on incomes above the national average. This is not a scheme that benefits the less well-off but one that benefits people on incomes above the national average.

Mr. Forth: I am no statistician, but I should point out that if one third of those parents are on incomes above the

national average, two thirds are on incomes below the national average. Inexorably the scheme benefits the less well-off.

Mr. Byers: The Minister leads me to my next point. I want to look at the backgrounds of those parents who are less well-off. The assisted places scheme is helping people from middle-class backgrounds who have fallen on hard times as a result of the Government's recession. The figures show clearly that 61 per cent. of the mothers and more than half the fathers of children who receive assisted places were themselves at either independent schools or selective schools. That is the reality. The Independent Schools Information Service has itself admitted that only 16 per cent. of people whose children receive assisted places are from unskilled or semi-skilled backgrounds.
The Government's stated aim—that those from less well-off backgrounds should be helped—is not being fulfilled. The Government intend, under the regulations, to spend slightly more than £70 million on the assisted places scheme in the coming academic year. Will that public money buy high-quality education? In many respects it is difficult to judge.
As my hon. Friend the Member for Durham, North-West (Ms. Armstrong) said, these schools are not subject to inspection. We do not have the right to inspect the quality of education that the young people in them receive. They do not have to follow the national curriculum, and there are no league tables of comparative examination results in the independent sector. Indeed, the independent sector heads have expressed strong resistance to the establishment of such league tables. But this autumn the Department of Education, at a cost of more than £650,000, will publish league tables for the state schools.
It is interesting to note which schools have opted out of the assisted places scheme or have never opted in—schools like Eton and Harrow. There is no evidence that a child who has been given an assisted place does any better than he would have done had he gone to a state school. The Audit Commission, which looked into this issue, has said that the evidence suggests that the children who are assisted into the private sector do not receive a measurably greater added value from their schooling as a result.
The message is quite clear. The regulations throw a financial lifeline to the private schools that are suffering because of the recession. The independent sector itself recognises that at present there is a record number of bankruptcies among private schools. It is for that reason that we have witnessed a dramatic increase in the fees charged under the assisted places scheme. In 1989, the average was £2,364; just two years later it went up to £3,100—an increase of more than 30 per cent. in an amount coming out of the public purse.
The right hon.Member for Brent, North (Sir R. Boyson) said that in his view the scheme was a rescue operation for distressed gentlefolk. I agree, but it is becoming increasingly clear that it is also a rescue operation for the financially distressed and failing private schools. The regulations represent a misuse of public money to subsidise a private industry. It is a public subsidy on a massive scale. If the regulations are approved, at least one school will receive more than £1·5 million of public money in the next academic year through the assisted places scheme, and many will receive more than £1 million.


They call themselves independent schools. What an absolute misnomer. Those schools are totally dependent on state subsidies for their very survival.
There has been no attempt to see whether we are getting value for the expenditure of public money. Some schools charge fees of more than £7,000 a year, others less than £2,000. Is any attempt made to see whether schools that charge more than three times as much as others in the independent sector provide real value for money? Will the Minister say that he intends to cap fee increases that can be charged to the public purse? If so, will the capping be at the current inflation rate of 3·9 per cent.? The House deserves answers to those questions.
The regulations will commit about £70 million of public money under the assisted places scheme. With a view to identifying the Government's priorities, it is worth reflecting on where else the Department is spending money. During the period to which the £70 million relates, only £14 million will be spent on teacher appraisal, although that is a vital initiative to improve the quality of the teaching force; reading recovery, which was announced in the full glare of publicity earlier this year, will get a grand total of £3 million to assist primary schoolchildren; governor training—so vital at present—will get the grand sum of £10 million. That is a clear sign of the Government's priorities. The sum to be spent on the assisted places scheme could employ an additional 3,500 teachers in the maintained sector. That could be a vital first step in reducing the ever-increasing class sizes in our schools. But, instead, the money is being used for the assisted places scheme.
The regulations are deeply damaging to the Government. They are an admission that, after 13 years of Tory rule, the condition of our public sector education is so poor that 30,000 of our most able pupils must be given an escape route. There can be no clearer condemnation of the failure of the Government's education policies than the fact that we are debating the regulations this evening.
The assisted places scheme is deeply flawed and divisive. It was born of dogma and it continues through prejudice. Even at this late stage, the Government should think again and redirect resources to benefit all our children.

Mr. Peter Griffiths: The hon. Member for Wallsend (Mr. Byers) started in fine style. I assumed that I would be able to agree with him because he said that the objective was to obtain high-quality education for every child. The trouble was that he seemed to assume that he and his party colleagues should define high-quality education. The point is that the definition is surely open to discussion. As there is no agreement between us on what sort of education is most suited to each child, it is a case for parental choice.
The Opposition would apparently deny parental choice of an independent school to those who could not afford the full fees. But some parents who are not well off wish to choose the independent sector. I do not know why the hon. Gentleman did not wish to help those who had fallen on harder times during the recession. In my view, they are

particularly worthy of assistance. Some parents cannot afford to take the choices that are available to those with higher incomes.
It is essential that parents who are convinced that their child would be best educated in an independent school have an opportunity to take that route. After all, as the hon. Members for Wallsend and for Durham, North-West (Ms. Armstrong) said, although one third of the parents of children on the scheme receive full remission of fees, the parents of the remaining two thirds make contributions out of their own pockets to the fees of the school that they have chosen. There is no need for the hon. Member for Wallsend to decide whether the school that costs £7,000 or the one that costs £2,000 a year is better. The parents should choose.

Ms. Armstrong: Does the hon. Gentleman support our call for more information about what is happening in the independent schools? If the Education (Schools) Act 1992 is to mean anything in the maintained sector, it should also apply in the independent sector.

Mr. Griffiths: My answer to the hon. Lady's first question is yes, but my answer to her second question is no. Certainly, information should be available so that parents can make informed choices.

Mr. Michael Stern: Will my hon. Friend give way on that point?

Mr. Griffiths: Let me finish the paragraph. Information should be available. I have not yet heard of an independent school which hides its light under a bushel. Equally, in legislation we have ensured that the state schools provide information so that parents can make an informed choice.

Mr. Stern: Does my hon. Friend agree that organisations such as the Independent Schools Information Service have set standards in the provision of full, comprehensible, comprehensive information about independent schools which we have wished for many years the state sector would match?

Mr. Griffiths: I am grateful for my hon. Friend's intervention. There is a mechanism whereby independent schools make information available. They are open to questions and visits long before parents decide to invest their own funds in the education of their children, having already paid for the education of those same children within the state system; so the information that the hon. Member for Durham, North-West wants is definitely made available.
I take issue with my hon. Friend the Minister, if he will not be unhappy at my doing that. Towards the end of his speech, he said that the regulations were technicalities. I am aware that he means that they are technical changes to an existing structure, but the fact that the regulations have been introduced, changes have been made and we are having this debate will be an encouragement and comfort to many parents.
During the events just before 9 April, the same comment was made to me time and time again in Portsmouth, which is not a city marked by individual wealth—it is a working-class city like any other great city in Britain. People said that they were worried about the effect of a change of political control on education


opportunities for children whose parents could not afford full fees in independent schools. That was a genuine and serious worry.
If the hon. Member for Durham, North-West is keen to know about independent schools, she should visit some in places such as Portsmouth. Some of the parents are bus drivers. A nurse who is a single parent provides for her daughter in an independent school. We should encourage such parents. They make an investment and decide for themselves.
When one comments on previous speeches in the debate, one often feels constrained to say that misleading points were made. I hope that the hon. Member for Wallsend accepts that his comments about Eton and Harrow showed an utter lack of knowledge about those schools. He is surely aware that, for at least the whole of this century, both schools have sought gradually to widen the range of the backgrounds from which their pupils come. Bursaries and scholarships are available to children who need them.
Eton and Harrow reject the Government's assisted places scheme, not because they do not want a wide social background of parents but because they are sufficiently well endowed from the past to offer those facilities themselves, but schools in cities such as Portsmouth need Government assistance.

Mr. Byers: I welcome the fact that Eton and Harrow make their own arrangements and do not rely on public subsidy. My point was that those schools are well known for the quality of education that they deliver. We cannot say the same for the 295 schools that are part of the assisted places scheme. As my hon. Friend the Member for Durham, North-West (Ms Armstrong) said, there is no way of judging the performance of the schools which are part of the assisted places scheme.

Mr. Dunn: Is that a reason to abolish the lot?

Mr. Griffiths: Of course it is not a reason to abolish the lot. It is not possible to say that every independent school is a perfect educational institution. Four institutions in the city of Portsmouth receive assistance under the Government's scheme. They are all first class, and the parents who send their children there are grateful for the opportunity that they have been given.
I realise that this is a short debate and I shall merely mention a few further matters to my hon. Friend the Minister. I am sure that parents will welcome the flexibility allowed by the regulations. From time to time, it is essential for us to ensure that we relate our assistance to new problems that may emerge. If schools offer small bursaries and scholarships to children with ability in certain subjects—for example, the arts—it is important that the receipt of such a small sum does not prevent the parents of a child on the assisted places scheme from receiving any financial benefit. The advantage of the amendment to the regulations is that if children on the assisted places scheme receive a small financial award from a school, they will benefit from it, as will children whose parents can afford the full fees. Surely the Opposition will welcome that and will want less well-off children to be able to take advantage of such awards.
The Opposition have made much play of the fact that not as many children benefit from the assisted places

scheme as we should like. If the Government return to the House to seek further funds to ensure that that target is met, I shall certainly give them my enthusiastic support.

Mr. Don Foster: In view of the way in which the debate has ranged widely, it is important to state that Liberal Democrats have no antipathy per se to the independent sector. We are more than willing to discuss ways in which the state and independent sectors could work together. I was interested to hear what the hon. Member for Dartford (Mr. Dunn) said about the possibility of the independent sector making a contribution by providing support for children with special educational needs. Those issues could be debated.
Today we are debating the assisted places scheme, and it is vital to find out what the order will do. Figures which show how much the assisted places scheme is costing have been mentioned. I should be grateful if the Minister would confirm in his winding-up speech the information that I have obtained from his Department, which suggests that in the current financial year approximately £76 million will be spent on the assisted places scheme, but it is estimated that next year, in 1992–93, spending will rise to £87 million. That is an increase of £11 million which, by my calculations, is 15 per cent. in cash terms and 10 per cent. in real terms. I should be grateful for confirmation of those figures.

Mr. Forth: Yes.

Mr. Foster: I am grateful to the Minister. We have heard it already.
In view of the fact that we are expected to support the large real terms increase contained in the order, it seems perfectly proper before we do so to question whether the scheme has been successful, according to the conditions originally laid down for it, and whether it has provided value for money.
As other hon. Members have said, when the scheme was initiated in 1980, it was clearly stated that the aim was to provide assisted places to bright children from less well-off backgrounds at high-quality independent schools. In last year's debate on the order, the then Under-Secretary of State, Mr. Fallon, said that the scheme was for "parents of humble means". Since the scheme's inception, there has been much research on the matter, and some hon. Members have referred to it. About a year ago, the hon. Member for Blackburn (Mr. Straw) quoted research suggesting that only about 10 per cent. of children on the assisted places scheme were from families of manual workers. That was contradicted by research for the Independent Schools Information Service, conducted by MORI, which suggested that 38 per cent. of children helped were from working-class backgrounds.
As I was confused by that conflicting research, I asked the research division of the House of Commons Library for its opinion, having collated all the relevant information on such research, and was told:
Much of the research on the operation of the scheme has suggested that it has failed in its prime aim of giving good education to children from relatively poor backgrounds and is mainly subsidising middle class parents.
I should be interested to hear whether the Minister agrees with that assessment and, if not, what evidence he has to substantiate his claim that the scheme is a success.
Secondly, there is the question whether the scheme is providing value for money. Other hon. Members have referred to that, but I hope that when the Minister responds we shall find out how he believes that it is providing value for money and value for the increase that he is asking us to support through the order.
The question of value for money was raised last year, when the then Under-Secretary of State said:
The value for money that is obtained from expenditure on the assisted places scheme is beyond question."—[Official Report, 17 July 1991; Vol. 195, c. 459.]
He justified that value for money in two ways: first, because of what he described as the "breadth and quality" of the curriculum offered within the independent schools. Presumably that was something of a slap in the face for state schools, which are constrained by the national curriculum, unlike independent schools which are allowed to do things better and to produce a "breadth and quality" not allowed to state schools.
Examination results were the only other justification that the Under-Secretary of State could find, and he quoted some figures for pupils on assisted places schemes. One would certainly expect such pupils to get good examination results. After all, they have been selected for their high level of ability, so that can hardly be a justification in its own right. We need clear evidence that the scheme is giving added value for pupils who take up the places offered. As hon. Members have already said, there is no evidence that the scheme is giving value for money, or to justify our support for the increased money in the order.

Mr. Stern: If the hon. Gentleman is looking for added value for the money being spent, why does he not consider every parent who, by choice and without constraint, sends his or her child to such a school on an assisted place basis? Why does he think that they do it if they do not think that they are getting added value?

Mr. Foster: I am grateful for the intervention because it suggests that the hon. Member for Bristol, North-West (Mr. Stern) does not support many of the detailed schemes that the Government have introduced. The Government have told us that the only way to assess success in schools is through a complex testing and reporting of results procedure. Clearly the hon. Gentleman does not support his Front-Bench colleagues in that respect.
I was referring to added value. I suggest that no one has given—I hope that the Minister will in his winding-up speech—any evidence of added value being provided by the scheme. There is no evidence of value for money.
Other hon. Members have referred to the Audit Commission having suggested that no added value was being provided. On 28 February, The Times—hardly a supporter of the Opposition—went further in its comments on the Audit Commission report and said:
The Assisted Places Scheme is a misuse of public money to subsidise a private industry.
In seeking more money for a scheme that neither meets its own criteria nor provides value for money, the Minister will have to put forward some very convincing arguments.
The Liberal Democrats do not seek to damage the education of pupils who are already on the assisted places scheme. However, we see no justification for continuing the scheme. It provides no value for money and it is not

beneficial to the education of the 93 per cent. of children who are in the state sector about whom we should be concerned. We should far prefer the energy of the Minister and of the Secretary of State, whom I see in his place, being directed to providing improvements in the state education system which has been so badly neglected in recent years. There are crumbling schools and teacher morale is low. Many concerns have been expressed not only by members of the teaching profession, by governors and by parents, but by Opposition Members. We will not support the regulations.

Mr. David Lidington: I am grateful for the opportunity to make a few remarks in support of the regulations. I confess that I was not surprised to hear the hon. Member for Bath (Mr. Foster) attack the assisted places scheme and the regulations. The continuing hostility of his party is not a cause for amazement. I had the opportunity of a council free place at a direct grant school. I remember that Mrs. Shirley Williams, the then Secretary of State for Education and Science and the spiritual and philosophical grandmother of the Front-Bench spokesmen of the Labour and Liberal Democrat parties, put the knife into the direct grant scheme in the 1970s. As with so many of the education reforms introduced by the Labour Government, she kicked away the ladders of opportunity up which so many Opposition Members had managed to ascend.
I am delighted to speak in support of the order. There are three reasons why the House should give the order its wholehearted support. First, as my hon. Friend the Minister mentioned, the assisted places scheme increases the choice of education available to parents on middling and low incomes. As has been mentioned, approximately one third of parents whose children receive assisted places get those places free. MORI research shows that the average income of the typical family benefiting from the assisted places scheme is about £10,000 per year. The average family benefiting from the scheme gains about two thirds of the average national household income. There is firm evidence that the scheme benefits the families and children for whom it was designed.
Secondly, in the context of the Government's broader schools policy, the assisted places scheme adds to the diversity of educational provision within the state sector. It provides an element of competition which we should welcome and not condemn. When Opposition Members complain because parents choose to send their children to independent schools through the assisted places scheme, they ask the wrong questions.
The question that the House should ask and the question which should be posed to local education authorities, to head teachers and to other members of the teaching profession, is why individual parents opt for places under the scheme rather than for the places available to them in neighbourhood schools.
I have the good fortune to live in and to represent part of Buckinghamshire. I know that our system, in which we still have both grammar and upper schools, formerly secondary modern schools—[Laughter.]—is such that on the whole we produce schools of fine quality to which parents wish to send their children. In response to the laughter from Opposition Members, I should point out that I meet parents who explain to me that not only the


grammar schools in Buckinghamshire, but the good upper schools are over-subscribed and have a queue of parents waiting to send their children to them. If one has a good, dedicated teaching force and a supportive local education authority rather than one which seeks to import once modish and now outdated education philosophies, one can produce in grammar and upper schools alike a quality of education from which parents will be pleased for their children to benefit.
Thirdly, the assisted places scheme helps to break down the barriers of class and social background. I should have thought that all hon. Members would have that objective in common. I am especially pleased that regulation 7 improves and strengthens the scheme to make it easier for schools to give help to parents of relatively modest means so that the independent schools taking part in the scheme can continue their work of reaching out beyond the category of parents who can afford to pay the full fees.
I find it surprising that the Labour party and the Liberal Democrats continually snipe at the independent sector for its alleged exclusivity.

Mr. Don Foster: indicated dissent.

Mr. Lidington: I am delighted to see the hon. Member for Bath shaking his head. I should be delighted if the Liberal Democrats are gradually coming towards the Conservative party's position. Only a short time ago, the Liberal Democrats said that the charitable status of independent schools needed to be thoroughly and critically reviewed. In my constituency, the Liberal Democrats at local level still display hostility not only to the assisted places scheme, but to any selection within the state system of secondary education, even if their national spokespeople now choose to keep quiet about that objective.
The assisted places scheme promotes opportunity. I hope that the Government will take on board the point raised by my hon. Friend the Member for Dartford (Mr. Dunn) about encouraging public schools further to get involved in the provision of education opportunities for people other than the academically gifted. My hon. Friend's suggestion about children with special educational needs was valuable and I trust that the Government will take it on board.
I do not pretend that the scheme of itself provides a complete or anywhere near complete answer to the challenges facing our education sytem. However, I believe that it is a valuable contribution to the promotion of excellence and quality in our system of state education. The regulations will have my wholehearted support.

Mr. Bill Etherington: Many hon. Members have spoken with great knowledge of the education system. Many hon. Members have been teachers or administrators of the education system. I will turn to the parents' viewpoint of education. I do not pretend to be an expert on education, but I know quite a lot about being a parent. Many jibes are thrown at the Opposition about the Labour party being opposed to the independent sector, but it is not true. The Labour party is opposed to the subsidisation of the independent sector, whether through favourable taxation or the assisted places scheme.
It is all very well the Government talking about choice, free enterprise and competition. I had no choice as a parent in 1983 when my 13-year-old daughter was

prevented from going to the split-site comprehensive school that she was attending because it had to close due to lack of resources. At a time when school governors have to decide whether to replace a teacher or repair the fabric of the building, it does not bode well to be told that the Government can spare £80 million to prop up the private sector.
I am a great believer in parents being able to choose to send their children to a private school if they can afford it. That applies to only a small percentage of the population. What I find objectionable is that those who are less well off have to subsidise the better-off through taxation so that they latter can send their children to private schools.
If we are to talk about competition and free market forces, let us see independent schools operate under that stricture. Let us see the end of tax relief and of the assisted places scheme. If there is money to spare, I assure everyone concerned that it is badly needed in the state sector. If the Government do not believe that, they should get out and talk to some of the poorer parents who do not want to send their children to private schools but to decent state schools. It is the Government's duty to provide the greatest good for the greatest number and to start putting resources into those schools.

Mr. Forth: Listening to this brief debate, one would have thought that we had not just had a general election in which page 18 of the Conservative manifesto said:
We will maintain the assisted places scheme, which gives access to independent education to many families who could not otherwise afford it.
That was a clear statement by the party that won the election.
It is sad that so many hon. Members should have taken this occasion to re-run the tired Opposition arguments to which we have had to listen and to which, no doubt, my hon. Friend the Member for Dartford (Mr. Dunn) had to listen in the distinguished years in which he occupied my present position.
The assisted places scheme is now established. As my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) pointed out, many parents of modest means throughout the land, in his constituency and others, look to such a scheme to give their children opportunities that would otherwise be denied to them. The whole spirit in which Conservative Members have approached the debate is so different from that of the Opposition that it epitomises the differences in attitude. The Opposition's attitude is carping and bitter whereas we constantly emphasise choice and diversity and the desire, through a relatively modest scheme, to give the maximum number of parents an opportunity to have access to schools to which they would like their children to go.
The hon. Member for Wallsend (Mr. Byers) seemed to be mystified about how any sensible parents would want their child to go to such a school or how they could make that choice without information. He then answered his own question by revealing that a large proportion of parents whose children go to assisted places scheme schools had gone to schools in the independent sector. What better recommendation could there be than that people with first-hand experience of the benefits of the independent sector should want their children to go—in this case, through the assisted places scheme—to similar schools? The hon. Gentleman provided the answer to his


own question. If he studies his speech in Hansard tomorrow, as is traditional, he will see that what I say is correct.
Two or three Opposition Members asked me what limit we have set on the fees increase for this year. The figure is 7·5 per cent., which is based on the increase that the maintained sector will receive this year. We want parity of treatment and I hope that that meets with the approval of the Opposition. It is straightforward.
I was asked several times how we can ensure quality in that sector. There are a number of ways of doing so. I have already suggested endorsement by parents. Others might be the examination results that those schools achieve, despite the fact that—I do not conceal it or dissent from it—the schools select in any case. Nevertheless, they then produce such consistently good and outstanding examination results that that in itself shows the sector's success.

Ms Armstrong: indicated dissent.

Mr. Forth: If the hon. Lady does not believe me, I shall send her some figures that will illustrate the point extremely well.
My hon. Friend the Member for Dartford asked an important question about children with special educational needs. There are encouraging signs that many independent schools are now providing facilities for children with dyslexia or other special educational needs. Provision is growing. That shows that the independent sector is keen to play a full and rounded part in our education system and that it does not wish to be perceived as elitist, as many Opposition Members still portray it. The sector still has not gone far enough, but it is showing good signs, which we wish to encourage.
My hon. Friend the Member for Portsmouth, North asked whether we expected to give further funds to the scheme. It is true that we are already making further funds available. We must strike a balance, as must any

Government Department in that matter. Part of the increase is accounted for by the fees increase to which I referred, although we have effectively capped that. An important element of the increase is our desire to see more and more children having access, through the scheme, to the independent education of their choice. That was endorsed in the election on the basis of our manifesto, and it is enjoying increasing support through parents' choice.
The hon. Member for Bath (Mr. Foster) cannot have it both ways. I should think that his constituents will be interested to hear his apparent opposition to and doubts about the scheme. I suspect that they may also be interested in his views about grant-maintained schools, to which I gather he is also hostile. How he squares that with the great former Liberal principles of maximum choice for the individual in society is for him to answer. Somehow, the move from Liberal to Liberal Democrat seems to have removed almost all the classical elements of liberalism at its best and introduced something more akin to latter-day socialism, which we used to associate with the good old Labour party. That, too, seems to have got lost, but I shall leave it to Opposition Members to sort it out among themselves.
This is an important annual occasion for the House to consider whether this well established scheme, so recently endorsed by the electorate again, and explicitly so, as a result of our manifesto commitment, should be given modest but realistic additional resources to enable an increasing number of parents and children to have the choice and diversity that it provides. We are convinced that it was right to introduce the scheme, that it is well founded and properly funded. We are pledged to continue that. The regulations endorse that, and I ask the House to support them.

Question put and agreed to.

Resolved,
That the draft Education (Assisted Places) (Amendment) Regulations 1992, which were laid before this House on 3rd July, be approved.

Orders of the Day — Value Added Tax (Cars)

The Paymaster General (Sir John Cope): I beg to move,
That the Value Added Tax (Cars) (Amendment) (No. 2) Order 1992 (S.I., 1992, No. 1654), dated 9th July 1992, a copy of which was laid before this House on 9th July, be approved.
As the first motion on value added tax is of smaller account than the second, it will be helpful to the House to take them separately.
The House will know that, in general, cars are not allowable as VAT inputs by businesses. However, my right hon. Friend the Chancellor of the Exchequer announced in his Budget that, from 1 August, private taxi operators, car hire firms and driving schools will be able to recover VAT on their purchases of new cars. That was provided for in the Value Added Tax (Cars) (Amendment) Order, SI 627.
That order provided the new relief for those taxi firms and driving schools operated by self-employed drivers and instructors, because otherwise they would have been unfairly penalised. It granted relief on cars to be let on hire on condition that they were used as taxis, or for self-drive hire or driving school cars. It did not extend relief to purchases by leasing companies. Since the order was made, we have learnt that some leasing businesses intend to execute leasing arrangements, including a clause restricting the use of leased cars to one of the uses that qualify for relief, thereby, in their view, entitling them to recover input tax. Such terms would not have commercial validity or rationale, and the lessors would have no interest in enforcing the restrictions or any way in which to do so.
We therefore thought it right to introduce the order to clarify the previous one, thus avoiding uncertainty. The order makes it clear that such a scheme would not succeed in avoiding tax. I support the order and commend it to the House.

Dr. John Marek: I welcome the Paymaster General's explanation of why SI 627 has been superseded by SI 1654, and in general I agree with what he said.

Sir John Cope: Not superseded, but supplemented.

Dr. Marek: Yes, supplemented. I was looking at SI 1654, which states:
Article 2(a) of the Value Added Tax (Cars) (Amendment) Order 1992 is hereby revoked"—
but it is then re-enacted in the provisions. How much will the original order and the new omnibus order cost the Revenue? It would be useful if the Paymaster General could give us an estimate.
There is a lesson to be learned on how to legislate. The Government should not table statutory instruments and then find that they have faults. I am not saying that the Government are not acting properly but, as a result of consultation, they often realise that the original order is insufficient or flawed, and so have to table another one. The more openness in government—especially on non-controversial issues such as the order—the better.
I would welcome it if, when the Government were tabling such orders, they could be made available for consultation in the House or published by the Government, as the Government did with the new value added tax regulations in anticipation of our entry into the single market in 1993. Much of the relevant draft legislation was published in advance of the Finance Bill.
The Opposition support the order, but it would be useful if the Paymaster General could tell us the cost. I see that a paper is being brandished, so I shall stay on my feet for another 10 seconds to allow it to reach the Paymaster General.

Mr. Bob Cryer: When it examined the statutory instrument, the Select Committee on Statutory Instruments thought that the explanatory memorandum provided by the Department was useful, and better than that on the original one. It was a much longer memorandum and we printed it in our third report, House of Commons Paper No. 52 for the 1992–93 Session. Apendix 1 contains the full explanatory memorandum, which I hope will be of use to the House and users of the instrument.
We should remember that such legislation has to be applied by the user and has the force of law. The number of orders and instruments produced by the Government is now approaching 3,000 a year. We hope that the memorandum will assist in clarifying the instrument.
SI 1654 blocks a loophole that the Revenue did not realise existed, and it is only a short order. The tatty draft order that we have does not give a price. Is the order replacing the previous one to be issued free of charge? The Government are partly responsible for ensuring that an order is as comprehensive as they want it to be. I do not blame the draftsman for the loophole as there are always smart alicks looking for such defects. That is why provisions sometimes have to be drafted in a complex way.
However, the Government do bear some responsibility and, as it is such a short order, it would be helpful if the Government issued it free rather than charging an additional sum. It should certainly he free to purchasers of the original 1992 order, which was an amending order, as was SI 959 which, in 1989, amended the original statutory instrument of 1980. As there are now three amending statutory instruments, will the Department consider producing a consolidated order? It may be of help to the user to have all the amendments in one document instead of having to purchase several at a time.
It should be the primary concern of both the Government and the House to make legislation as clear and succinct as possible. I know that it is difficult, for the reasons that I mentioned. The Government should consider a consolidation provision at some stage. I hope that they will do so sooner rather than later.

Sir John Cope: The hon. Member for Wrexham (Dr. Marek) asked me about the cost of the order. The legislation stops a loophole and, as far as we know, there will be no extra cost. Indeed, it may save us money that we might otherwise have had to pay had the order not meant what we thought the original order meant. SI 1654 is for clarification.
The original order, SI 627, cost £50 million to produce. The hon. Member for Bradford, South (Mr. Cryer) explained that the Select Committee on Statutory Instruments had issued an explanatory memorandum. He was right to say that it would be useful to users of the order. He asked if we were to give away the order. That is most unlikely. It is a matter for the Stationery Office to decide, and it has to recover its costs. The original order cost only 65p, so it is not expensive, and we should recover the cost of producing such documents.

Mr. Cryer: When the fault clearly lies with the Government, it is usual for them to issue a replacement order to purchasers of the original order. While it may not be fair to ascribe all blame to the Government, they should bear at least some of it. As the Paymaster General seems reluctant to show concern for the user from the Dispatch Box, perhaps he will consider the matter further after the debate. When the Joint Committee on Statutory Instruments finds that an instrument has to be amended as something is seriously wrong, it is common for the Government to issue a free replacement. Will the Paymaster General give consideration to the matter?

Sir John Cope: I shall consider the issue outlined by the hon. Member for Bradford, South. We do not consider that the original order, SI 627, did not fulfil our intentions. However, it seemed that there might be a challenge in the form of an avoidance scheme and, by issuing the clarifying order before either of them took effect, we avoid time and trouble for the Government and for others. The hon. Gentleman asked whether we had thought of producing a consolidating order. We are paying attention to that and will probably produce some VAT consolidating orders. However, we have not yet decided to do so. The hon. Gentleman's recommendation is sensible and we shall certainly consider it.

Question put and agreed to.

Orders of the Day — Value Added Tax (Payments on Account)

The Paymaster General (Sir John Cope: I beg to move,
That the Value Added Tax (Payments on Account) (No. 2) Order 1992 (S.I., 1992, No. 1668), dated 13th July 1992, a copy of which was laid before the House on 13th July, be approved.
The order introduces a scheme of VAT payments on account for the largest VAT payers from later this year. Commissioners regulations will also be necessary, giving a little further detail on the operation of the scheme.
As the House knows, the instrument has had a long gestation period. In October 1991, my right hon. Friend the Chancellor of the Exchequer announced that postponed accounting was to be reintroduced on goods received from the rest of the European Community. About 90,000 businesses will gain a cash flow advantage from that change in 1992–93. To prevent an increase in the public sector borrowing requirement, my right hon. Friend the Chancellor decided that the largest VAT payers should account for VAT monthly, as happens in most of the Community, rather than quarterly. About 1,600 businesses will be affected, and they are those with a VAT liability in excess of £2 million in the year ending 31 March 1991.
Following wide consultation with representative bodies, my right hon. Friend the Chancellor announced in the Budget just before the election that he had decided to modify the original proposal so as to require monthly payments on account instead of monthly returns from the largest VAT payers. The traders will continue to submit VAT returns quarterly and their liability will be adjusted by the amount that they have paid on account in the two previous months. That will minimise the admistrative burden on businesses and avoid exposing them to extra penalties while still protecting the PSBR.
Customs and Excise issued a draft leaflet on Budget day and invited comments. As a result, we have made some changes which should be helpful to businesses. First, we intend to exclude from the scheme businesses for which, although the VAT liability in 1990–91 exceeded the £2 million threshold, the figure for the year immediately preceding and the year immediately following were below that level. That is intended to take account of exceptional transactions arising in 1990–91 which might otherwise mean that a smaller business would be unjustly caught in the net.
Secondly, we have allowed for payments to be reduced if the VAT liability falls to less than 80 per cent. of that in the reference year used to calculate the payments. That is more generous than the two thirds originally proposed by the Chancellor. A short time ago, I was able to announce that the selection criteria for inclusion in the scheme will be reviewed when some experience has been gained of its operation.
As hon. Members will be aware, there have been representations from several bodies to the effect that it was unfair to put the burden of payments on account on the largest VAT payers. They said that it would be fairer to target the businesses that would benefit most from the new postponed accounting arrangements, that is, those who import goods from Community member states. We have carefully considered that but have concluded that such a scheme would run an unacceptably high risk of challenge in the European Court. Accordingly, the Chancellor was unable to accept those proposals.
In each VAT quarter, payments on account will be due by the last day of the second month and the last day of the third month and subsequently adjusted to the correct quarterly amount when the VAT return is sent in. Each payment will be one twelfth of the total VAT due, excluding the VAT on goods imported other than from member states in the reference year. For the first year, the reference year will be based on the 12 months ending in March, April or May 1992, depending on the VAT return cycle for the business in question. Provision is made for VAT periods of other than three months.
I am glad that in Committee the hon. Member for Wrexham (Dr. Marek) and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) gave some support to the changes that we have made since the Budget. However, the Chancellor has made it clear that it would be wrong for the Government and the taxpayer to stand the cost of the postponed accounting arrangements on the PSBR for this year. In response to issues raised by business in the consultation exercise carried out by Customs and Excise, the scheme allows substantial easement of the original terms proposed in October 1991.
When the first version of the order was considered by the Statutory Instruments Committee, it thought, as hon. Members may have noted from the Committee's report, that some aspects of the order might be outside the vires provided. Therefore, last week we thought it right not to move the first order and to replace it with the second order, which the Statutory Instruments Committee considered yesterday. That is all documented in the Committee's report, and the order had been revised to take account of the Committee's comments.

Dr. John Marek: The order results from the Budget proposals in March. It replaces the original order No. 1510, and I again question this apparent waste of paper, time and money. I shall be interested to hear what my hon. Friend the Member for Bradford, South (Mr. Cryer) has to say about the Joint Committee's findings. Not much time was allowed for comments because people were given until the end of March following the Budget. It is unsatisfactory once again to have two orders, the first of which is not being proceeded with although it has been laid on the Table.
The instrument takes account of changes in the VAT rules which are to be implemented on 1 January 1993. The Opposition do not quibble with that, and will not force a Division. The order is clearly the result of protracted discussion with interested parties in various industries and in the House. It proposes that large traders with a VAT liability of more than £2 million in the year to 1 April 1991 would have to make monthly payments on account from, I think, the end of November. I am told that there are about 16,000 large companies to which the order will apply. Normal quarterly returns would be made. The on account figure is to be calculated by reference to actual payments in the year to March, April or May 1992, depending on the exact time of the quarterly return.
However, there are likely to be some problems. Traders over the £2 million limit might suddenly, as a result of the recession or some other unforeseen, or even foreseen, circumstance, fall below that threshold, thereby falling outside the scheme. But they will have to persuade

Customs and Excise that they should come off the scheme. The original statutory instrument, 1510, paragraph 4, headed
Persons to whom this Order applies",
said:
Save as the Commissioners may otherwise allow, a taxable person falls within this article if …
I shall not read the whole paragraph. The important phrase was
Save as the Commissioners may otherwise allow".
That seemed to allow the commissioners some discretion about whether a person should be taxable under the scheme.
The new statutory instrument, 1668, does not have those words. It is completely rewritten. My hon. Friend the Member for Bradford, South may wish to comment on that in due course. Has the ability of Customs to decide whether someone should be in the scheme disappeared as a result of the new statutory instrument?
If the percentage of VAT due is down to 80 per cent. or less, adjustments can be made to the monthly payments. That provision has been carried forward from the old statutory instrument to the new one. Paragraph 11 of statutory instrument 1668 says:
with effect from the date of the written approval by the Commissioners of a written application by the taxable person to that effect, the lesser amount shall be substituted for the greater amount and the amount of each payment on account beginning with the first payment on account which falls to be made after the date of that approval shall, subject to article 10 above, equal one twelfth of that lesser amount.
But Customs has to be satisfied that the total amount of tax due is less than 80 per cent. There could be delays. If there are delays, can the Minister assure the House that they will be kept to a minimum and that the commissioners will act as expeditiously as possible? It clearly cannot be right for the commissioners to wait a month, perhaps because they are snowed up with other work, and to insist on certain traders paying sums on account which are clearly well above the sums that they would be paying if an up-do-date view were to be taken of their trading activities. That is a problem on which the House requires assurance.
As the Paymaster General said, domestic traders will be affected rather than traders who import and export, who will be able to take account of the postponed accounting system. The Paymaster General also said that there will be a review of the criteria for selection for inclusion in the scheme. Can he give some idea of the timing of that review? Clearly the sooner the consultation is undertaken and the decisions made by the Government, the better. One year, a trader may be above the £2 million threshold, and the next below it. The Government might want to increase the threshold to take account of inflation from time to time. That can lead to uncertainty for a trader which cannot be good for his business.
Therefore, I make a plea to the Government to get on with the review. No doubt it is right that there should be some experience of how the present system works, but it should not take a day longer than necessary. After that, I hope that, as a result of the review, there will be a generally accepted view of how the system should operate.
A further problem may arise as a result of the related rules on groups for companies that can be sold out of a large group. There seems to be an inability to leave the club. Will the commissioners have any power to ensure that such difficulties do not develop? That could easily be an important issue, particularly as the original statutory instrument seemed to give the commissioners the power to


take a particular trader out of the scheme without having to give any reason, which is not the case in the new statutory instrument.
A problem arises as a result of traders whose liability last year exceeded their liability this year. They will have an adverse cash flow to bear as a result of the proposal. Paragraph 11 provides that taxpayers may apply for a reduced payment if their total tax is likely to be below 80 per cent., but no other situation is covered.
I have dealt with some of the difficulties that traders may have with regard to the 80 per cent. rule and the fact that there is no immediate way of ensuring that a trader falls out of the scheme's remit, except perhaps by waiting a year in order to demonstrate to the commissioners that his total tax revenue is below £2 million. That is too crude and it needs to be refined. It is a bit hard on traders, particularly domestic traders, for example in the service industries, who will not receive any corresponding cash flow benefits from the new intra-EC rules.
Will the Paymaster General think ahead to 1996–97? If there is such an adverse effect on domestic traders when we move to an origin-based VAT system, can the situation be redressed in any way? For the sake of equity, there should be such redress. Will the Government bear in mind that domestic traders will have to bear extra costs as a result of this statutory instrument and any new legislation leading up to 1996–97, and if possible to redress the cost?
I am also advised that the Customs leaflet issued in 1992—I have not seen it so I could be wrong; I usually check everything, but I have not been able to obtain the leaflet—contained some ambiguous statements. The statutory instrument will affect it and it will need to be rewritten and reprinted. Has the Paymaster General or his Department had any representations on that? If so, I hope that he will take them on board and will print a new and unambiguous leaflet so that traders know their position exactly.
I am concerned about the validity of the Government's proposals. This could be a serious point, depending on the Government's legal view. There is the problem that the Government have conceded the practical difficulties of submitting monthly returns, but the relative provisions of the sixth directive, article 22(5), may be read as restricting the ability of member states to deviate from the rule requiring payments one month after the VAT return period to the case where interim payments are required for every taxpayer.
Are the Government satisfied that that proposal and the statutory instrument are permitted by the fifth directive? If they are not, will they seek an appropriate derogation? Article 22(5) of the sixth directive states:
Every taxable person shall pay the net amount of the value added tax when submitting the regular return. Member States may, however, set a different date for the payment of that amount or may demand an interim payment.
If that provision applies to some, does it apply to all?
I hope that the Paymaster General can say that there is no risk of infraction proceedings, or whatever, initiating in Brussels as a result of the statutory instrument. With those reservations, I hope that the order will be passed this evening.

Mr. Michael Stern: I commend my right hon. Friend the Paymaster General for his courage in introducing this statutory instrument today. I appreciate that there may be budgetary reasons for doing so before the summer recess, but I refer to my right hon. Friend's courage because the scheme that the measure introduces has come under considerable attack—and will continue to do so.
Some time ago, representatives of the 1,600 companies most affected were assured by my right hon. Friend the Chancellor of the Exchequer that, if an alternative were submitted, it would be considered. In his opening remarks, my right hon. Friend the Paymaster General dealt effectively with one alternative—to load the burden of the new impost on to importers. He did not refer, however, to a suggestion made by the companies most adversely affected by the order. I refer to the so-called Danish solution, which would negative at least part of the resultant adverse cash flow that companies fear will result from the order. Perhaps my right hon. Friend will explain why the Government decided to reject the Danish solution.
A more serious concern was touched on by the hon. Member for Wrexham (Dr. Marek)—the relationship between the order, the treaty of Rome, and the European Court. My right hon. Friend is aware that a legal opinion is winging its way to the Treasury, where it is expected to arrive on Friday—from Maître Waelbroeck, who is regarded as an expert—to the effect that there is a serious risk that the order will provoke infraction proceedings under article 1 of the treaty on the grounds that it will distort competition, introduce tax neutrality, and discriminate against importers.
I have neither the knowledge nor the foresight to say whether that opinion has any validity, but given that copies will reach the Treasury as soon as they are available, it is legitimate to question my right hon. Friend as to the robustness of the Government's opinion that there is no risk of infraction proceedings under article 101. I shall be grateful if my right hon. Friend can provide reassurance on that point.

Mr. A. J. Beith: This change will affect 1,600 large businesses. It seems harsh that the firms which will be adversely affected by the requirement for monthly payments will often be domestic concerns trading at home, whereas the businesses which may benefit from the windfall advantages will in many cases be companies which import goods into this country. I appreciate that we cannot devise a procedure that will have the reverse effect, because that would be contrary to Community law, but that unfortunate feature strengthens the case for examining the grievances of those large companies on their merits.
Value added tax is not the property of the businesses which collect it from their customers; it is handed over to Customs and Excise. Nevertheless, the realities of life are such that many businesses will not have collected on VAT invoices to their customers by the time they are required to remit their monthly VAT payments on account. They therefore make an interest-free loan to the Government.
That is a significant burden, particularly at a time of recession. Once a company is included in the monthly


payment scheme, it incurs a significant cost. That is relevant to the timetable issue and to the selection criteria for inclusion in the monthly payment scheme. Whether or not a company is in the scheme could make a significant difference, arid might adversely affect its competitive position.
The hon. Member for Wrexham (Dr. Marek) pointed out that the potential move to an origin-based system in 1997 or later could bring a complete change and result in additional Government revenue. The businesses concerned wonder whether there will be alleviation at that stage for firms which have been adversely affected.
The businesses which will be most affected by the order have gone to considerable lengths to make alternative proposals. They share the feeling that they are not being fairly treated, but that they are being unjustly used to make up a hole in the Government's finances, being singled out merely by size. That is the kind of thing that people often describe as rough justice, but in my experience it is really injustice incorrectly described.
Customs and Excise may take the view that the largest firms have the broadest backs, on which such an injustice can more easily be laid, but in these recessionary times few large firms can easily bear unreasonable and additional burdens, or make tax payments for which they may not be liable and which amount to interest-free loans to the Government.

Mr. Bob Cryer: The front page of the statutory instrument states:
This Order supersedes S.I. 1992/1510 published on 2nd July 1992 and is being issued free of charge to all known recipients of that Statutory Instrument.
That demonstrates a point that I made in respect of the previous order. The cost to the public of this legislation is absolutely outrageous. A couple of sheets of printing costs 55p, and a 50-page document can cost £10, £12 or £15. It is no excuse to advance the argument that a copy of legislation was too expensive to purchase. The Government do not allow any exemption because of cost.
The order has had a chequered career. It was originally tabled for debate on 7 July. On that day, the Select Committee on Statutory Instruments was also due to consider it. Hon. Members probably do not know that the Committee has a duty to report to the House whether a Minister is making unusual use of his powers, whether the order that he is presenting is within his powers or is ultra vires, whether the order is ambiguous and whether certain other criteria have been observed. The House, not the Committee, lays down those criteria. If the Committee is to report an instrument, the Department concerned must have an opportunity to defend its position.
It was clear that, if the Select Committee on Statutory Instruments decided, for instance, to take evidence and not to report the incident to the House on 7 July, the statutory instrument would, in effect, slide through. However, the Committee determined that, because certain parts of the original order were ultra vires, it should be reported to the House. Fortunately, we had a memorandum, and we decided not to take evidence.
Because the Government are producing so many statutory instruments, they are turning the House into a sausage machine. They are not allowing the Select and Joint Committees on Statutory Instruments adequate time in which to do their job properly and report fully to the

House. I am pleased to say, however, that, because of the Select Committee's report, the Government decided to withdraw the original order. My hon. Friend the Member for Wrexham (Dr. Marek) alluded to the reasons for the report.
Articles 4, 5, 6, 11 and 14 of the original order were all prefaced by the words
save as the Commissioners [of Customs and Excise] may otherwise allow".
Nothing in the parent legislation allowed the commissioners that discretion. It was clearly a powerful discretion, for it allowed the commissioners to decide whether a person was subject to all the powers set out in those five articles; and it was not contained in the primary legislation. The Committee's view was that the discretions were ultra vires—that is, that they were not within the powers of the Minister.
Following advice from counsel, the Committee decided that another section of the order was ultra vires. The order imposed a duty to make advance payments on divisions of a corporate body; the primary legislation allowed such impositions to be made only on a corporate body—and divisions of a corporate body do not constitute corporate bodies. We considered that to be outside the Minister's powers, and accordingly reported it to be ultra vires.
I am pleased to tell the House that—as can be seen from the report that we have placed in the Vote Office—the order that we are debating has removed that discretion from the commissioners, thus conforming with the Value Added Tax Act 1983. Taxable persons are now regarded as corporate bodies, rather than as divisions of a corporate body: that, too, brings the order within the vires set out in the primary legislation.
On that occasion the Government behaved very sensibly, but that is not always the case. On other occasions, after the Committee has claimed that elements of similar orders were ultra vires, those orders have been tabled for discussion. In such instances, I have raised points of order, asking the Government to withdraw the orders and defer debate so that they could be examined with a view to tabling correct versions. The Government have simply pushed the instruments through the sausage machine, which is not good enough.
The Minister must accept the commendations of the House—although he may feel uncomfortable about doing so—for his sensible withdrawal of the order, and its retabling in a correct form. That should happen more often. If the Select and Joint Committees on Statutory Instruments are able to identify a vires point—a point relating to the powers of Ministers—there should be an automatic requirement for the House to see the Committee's report before any order is debated. In my view, nothing less than that will do. Sometimes, however, the Government simply press ahead when the Committee is about to report on a vires point, ignoring the work that it has done.
Let me add that the Select and Joint Committees are not the most televised parliamentary Committees. They are not a focus of great publicity; their business is a fairly dull routine, which is carried out in the public interest. That may sound precious, but it is true. I think that the Committees' work at least merits recognition by the House.

Dr. Marek: I entirely agree with my hon. Friend. Difficulties are likely to be caused for traders, however, by


the withdrawal of that phrase from the order. I am beginning to wonder whether we should not proceed with the statutory instrument, and whether the original wording should be reintroduced. That could be done as part of our proceedings on next year's Finance Bill. I should be interested to know what my hon. Friend and the Minister think of that proposal.

Mr. Cryer: Delegated powers are conferred by primary legislation. If the primary legislation does not contain powers for the Minister to award discretion to the commissioners, he cannot award that discretion. If discretion is needed—this is a particularly onerous system, requiring advance payments; as has already been said, 1,600 companies will be affected—it is a requirement for primary legislation.
The Select and Joint Committees do not examine instruments on their merits—which, incidentally, makes it even more iniquitous that the Government should, at times, ignore the views of the Select Committee, which has a Conservative majority. It is not as though its members were seeking to undermine a Government policy on merit; they are simply carrying out the task allotted to them by Parliament, which specifically excludes debate on merit. My hon. Friend the Member for Wrexham has made a perfectly fair point, to which the Minister must reply. We must establish whether further primary legislation is required.
Customs and Excise has provided the explanation given to the Select Committee. It sets out the position fairly, explaining the original faults in the instrument, their recognition and their replacement by the new Value Added Tax (Payments on Account) (No. 2) Order, which takes those faults into account and—as far as the Committee is concerned—remedies them.
On the question of merit, if the order leads to companies having difficulty in making advance payments, the Government must take that into account. We are in the middle of a deep and, alas, deepening recession. I emphasise the dangers of making decisions about value added tax or other tax payments in the middle of a recession that would further exacerbate the recession.
I hope that other Government Departments will follow the example set by the Minister and his Department and make sure that the recommendations of the Select and Joint Committees on Statutory Instruments are taken into account before a debate is held. About 1,600 companies will be affected by the order. I repeat that the legislation that affects the vast majority of the British people is not primary legislation. That goes through the House in dramatic circumstances, with a crowded House for the Report stage and with great interest shown in the Standing Committee proceedings. The debates are lengthy. Delegated legislation generally goes through the House in an hour and a half.
We are not considering the majority of instruments—negative procedure instruments—that are not even debated yet frequently contain criminal sanctions. On this occasion we are, fortunately, able to deal with a corrected instrument, but on many occasions faulty legislation that was delegated to Ministers and their Departments to draft goes through the House without examination. That is an imposition on the British people. They have to implement the legislation, but they are often inhibited from going to

court for a clarifying decision because of the expense. It is our fault if defective legislation leaves this place. It is not the fault of the people outside who have to implement it. Mercifully, on this occasion we have corrected the legislation.
I hope that the Minister will not mind my few words of approbation. His political career will, no doubt, suffer as a result. Other Ministers had better look out, therefore, for if I crucify them with praise they will have to look towards a dreaded occasion—unless they wish to avoid it by taking similar corrective action.

Sir John Cope: The hon. Member for Bradford, South (Mr. Cryer) commended me both at the beginning and at the end of his speech. He need have no hesitation in doing so. I am delighted to accept any commendations from him that are on offer, because I know that he would condemn me if he thought that I was not doing the right thing at any point. He need not worry about my political career. I know that Whips have very short memories. I do not believe that there will be any difficulty in that respect, whatever happens to my career.
The debate provides me with the opportunity sincerely to commend the work of the Select Committee on Statutory Instruments. When I was in the Whips Office I came to know a little about its proceedings and how hard the hon. Gentleman in particular and his colleagues on the Committee work on behalf of the House. We had an exciting debate earlier this week about membership of some of the more glamorous Select Committees. I know, however, how difficult it sometimes is to get Members to serve on some of the less glamorous Committees, such as the Select Committee on Statutory Instruments, which does extremely important work on behalf of the House.
I agree with what the hon. Member for Wrexham (Dr. Marek) said—that in some respects it was unsatisfactory not to proceed with the first order. However, I considered it right not to do so, but to amend it in the light of the Select Committee's report. There is always legal doubt in these cases. I do not say that we were necessarily 100 per cent. convinced that the vires points raised by the Select Committee were exactly correct. Nevertheless, there was sufficient evidence to convince us that it would be right to redraft the statutory instruments and avoid a potential difficulty. That is what we have done by bringing the revised order before the House.
Therefore, the words that the hon. Member for Wrexham quoted—
save as the Commissioners may allow"—
have disappeared from the instrument and have been replaced with more precise wording to cover the two points that we were anxious to amend as a result of consultations since the Budget.
The hon. Member for Wrexham also asked me whether there would be any delay over deciding about the 80 per cent. rule that has been mentioned so many times. We shall do our best to avoid any delay. About 1,600 traders are involved in the scheme. The number of traders who will make applications in connection with the 80 per cent. rule is much smaller. I do not anticipate, therefore, that there will be a huge burden of work. I hope that we shall be able to deal expeditiously with the applications.
As the hon. Member for Wrexham acknowledged, the review will take place after we have gained some experience of working the scheme. We expect to consider


how the scheme is working next spring or summer. The hon. Gentleman also asked me whether this provision will be reviewed if and when we move to an origin system of value added tax. It will, of course, need to be reconsidered at that time, but I cannot anticipate either when that will be or what the results of the review will be.
The hon. Member for Wrexham mentioned that representations had been made to him about the leaflets. In the light of the order, assuming that it is agreed tonight, we shall issue revised guidance as soon as possible.
Finally, the hon. Gentleman referred to the sixth directive and asked whether we were satisfied that we had authority under that directive to pursue the order. The answer is yes, we are satisfied that we have that authority. Any Minister will be concerned about technical arid legal matters. I am not a lawyer. There is bound to be slight concern, therefore, as to whether all its provisions can be upheld. We have received clear legal advice on the point, however, and I am in no doubt about it.
My hon. Friend the Member for Bristol, North-West (Mr. Stern) referred to the Danish solution, as he described it, to a similar problem. Denmark is one of the few countries in the European Community that has three-monthly returns. The time allowed for payment at the end of that period is one month and 20 days. That is 20 days longer than is allowed in the United Kingdom. The effect of the Danish system in shaving a few days off the time allowed for payment here creates no difficulty as it would in this country, where it would shorten, I think unacceptably. the time allowed for payment. That course is not therefore open to us.
My hon. Friend referred also to a legal opinion which we were told the day before yesterday is now on t he way and which casts doubt on the order in relation to article 101. We have considered that point. Without the benefit of the new legal opinion that was promised to us recently, our clear advice is that the order is in order in that respect. Although there has been a fairly long consultation period over the order, I cannot help but remark upon the fact that that legal opinion has been promised to us a day or two after the House rises for the summer recess.
The timing is obviously extremely difficult from our point of view. It is essential that the order is passed so that businesses know where they stand and we have time to make proper arrangements. Were we to hang on for a few days until we saw the promised new legal opinion, there would be a much greater effect on our ability to have the order approved by the House, with consequent disorganisation for Customs and Excise and for the traders involved.

Mr. Stern: Speaking as one chartered accountant to another, does my right hon. Friend agree that the delay in providing the legal opinion is only what one can expect from a lawyer?

Sir John Cope: My hon. Friend has made his point and I do not need to add to it.
The right hon. Member for Berwick-upon-Tweed (Mr. Beith) said that VAT money collected by firms is not the property of those firms. I agree with that and it is part of the rationale for the process.
The hon. Member for Bradford, South drew my attention to the cost of the order, or at least to the fact that

it is free because it is a replacement. It is a complete replacement and the previous order is now of no value and can be thrown away.
There was a suggestion during the debate about monthly payments. The House will know that in some circumstances businesses can pay their VAT or send in their VAT returns monthly. Some seasonal traders have said that the one twelfth rule would be difficult for them because of the arithmetic workings and the seasonal nature of their trade. Customs and Excise will allow such businessses, upon application, to make their VAT returns and payments monthly as an alternative to quarterly returns with payments on account if it is judged to be right. It is for the businesses involved to consider that and to make an application if they think that it would be helpful.

Mr. Beith: The Minister quoted my observation that the money collected in VAT is not the property of the business but should be remitted. He omitted to refer to the other side of the coin, which is that money not collected in VAT and not yet returned through the normal business invoicing and terms of trade is not money that the business has to hand over. Therefore, the business is making an interest-free loan in circumstances that do not apply to the majority of traders. I hope that the Minister will continue to keep that in mind, because that is what this is all about.

Sir John Cope: As the right hon. Gentleman said, the order is all about cash flow. If we did not have the order, the Government's cash flow—the public sector borrowing requirement—would suffer considerably. There is no way in which we can reverse that painlessly for the businesses and place the Government in a position where their PSBR does not suffer. That is the underlying reason for introducing the order, and why I commend it to the House.

Question put and agreed to.

Resolved,
That the Value Added Tax (Payments on Account) (No. 2) Order 1992 (S.I., 1992, No. 1668), dated 13th July 1992, a copy of which was laid before this House on 13th July, be approved.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

DATA PROTECTION

That the draft Data Protection (Regulation of Financial Services etc.) (Subject Access Exemption) (Amendment) Order 1992, which was laid before this House on 22nd June, be approved.—[Mr. Robert G. Hughes.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

RIGHTS OF THE SUBJECT

That the draft Access to Personal Files (Housing) (Scotland) Regulations 1992, which was laid before this House on 30th June, be approved.—[Mr. Robert G. Hughes.]

Question agreed to.

PETITIONS

Heywood Magistrates Court

Mr. Jim Callaghan: I have no wish to detain the House, but I wish to present a petition that has been signed by 4,000 of my constituents in Heywood protesting at the proposed closure of Heywood magistrates court. It was given to me by Miss Susan Emmett and states:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled;
The humble Petition of Residents of Heywood and others;
Sheweth that Heywood Magistrates' Court is part of Heywood's heritage and a familiar landmark in the town; that if it is closed, all proceedings which currently take place in Heywood Magistrates' Court will be transferred to Rochdale or Middleton, to the inconvenience of the local community.
Wherefore your Petitioners pray that your Honourable House will ensure that a magistrates' court is retained in Heywood.
And your Petitioners, as in duty bound, will ever pray, &c.

To lie upon the Table.

RN Stores Depot, Eaglescliffe

Mr. Michael Bates: I am grateful for this opportunity to present a petition in the name of six of my constituents. It concerns the proposed relocation of 180 jobs from the Royal Naval stores depot, Eaglescliffe to the Bath area. The petition was handed to me by Mrs. Eileen Sharp of Park End, Middlesbrough and is signed by Miss Bruce of Ormesby, Mr. Weighell of Marske, Mr. Wheatley of Marton and Miss Sykes of Eston.
While understanding that the idea of losing jobs to another part of the country is never particularly welcome and recognising the ever-increasing need to improve efficiency in Government Departments, which can be achieved by economies of scale and centralising Departments, my petitioners would have me suggest that the relocation should not move the jobs to Bath, but that the Bath jobs should be relocated to the Eaglescliffe area. That would provide significant cost savings. The petition states:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
The Humble Petition of the members of the workforce of the Royal Naval Stores Depot at Eaglescliffe.
Sheweth that a proposal has been endorsed to create a centralised Naval Support Command in the Bath area which necessitates the loss of 180 jobs from the Royal Naval Stores Depot at Eaglescliffe near Stockton-on-Tees.
Wherefore your Petitioners pray that your honourable House urge the Secretary of State for Defence to abandon the proposal to transfer the 180 jobs from Eaglescliffe.
And your Petitioners as in duty hound will ever pray &c.

To lie upon the Table.

Orders of the Day — AWD (Bedford) Trucks

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert G. Hughes.]

Mr. David Madel: This short Adjournment debate is an appeal for help to try to save AWD (Bedford) Trucks in Dunstable in my constituency from total collapse. I am delighted to see that my hon. Friend the Member for Luton, North (Mr. Carlisle) is listening to the debate, because he shares with me intense concern about the current position.
AWD (Bedford) Trucks is now in the hands of the receiver. It went into the hands of the receiver on 4 June this year. In my view, the company can be saved if a large order for civilian—I stress the word "civilian"—lorries for Libya can be given the go-ahead.
I shall give a brief history of the company. Bedford trucks have been made in Dunstable for 40 years, and for longer than that in Luton next door, part of which is represented by my hon. Friend the Member for Luton, North. It used to be part of the giant American firm, General Motors, which has owned Vauxhall Cars, manufactured in Luton, since 1925. Over the years, Bedford Trucks has provided employment for thousands of men and women in the Dunstable area. In addition, the prosperity of many suppliers to Bedford Trucks has been sustained by a viable truck plant in Dunstable.
In the 1960s and 1970s, as Vauxhall cars in Luton struggled desperately with huge financial losses and product problems, Bedford Trucks made a substantial contribution to keeping the car plant going.
Bedford Trucks stopped being part of the General Motors group as a result of the collapse of the General Motors-Leyland deal in the mid-1980s. That severe commercial setback had bad economic consequences for Dunstable and the vehicle industry in this country. I am looking forward to reading about what the people at the top thought about it and Lady Thatcher's memoirs on it. I hope that I shall be around 30 years on from 1986 to see the Cabinet papers. I know how keen the Government are to publish more detail of what goes on. Who knows—the 30-year rule may be changed to a 20-year rule.
As a result of that great commercial crisis, General Motors pulled out of Bedford Trucks, which left Dunstable dangerously exposed. Although the David Brown family, who took over the plant, and the work force have made tremendous efforts to keep the plant going, everybody in the Dunstable area knows that the number of people employed in the plant has gone down since the crisis of the mid-1980s.
The present position is summed up in the receiver's letter of 1 July to my right hon. Friend the President of the Board of Trade. It says:
Our role, as you will be aware, is to maximise realisations and our view is that a going concern sale of most or all of the business would not only enhance realisations but would also preserve employment and contribute to exports …
We have been attempting to encourage interest in the business and it has become clear that prospective purchasers of the business as a going concern have generally required of us, not unreasonably, confirmation of the precise status of the contract to supply trucks to Libya. I understand you are aware of the background to this contract and the current impasse … We now understand that the matter lies with you for a decision. From our analysis of the situation, I should say that we do not accept that the trucks are 'military goods' and


that there is, therefore, any basis on which the contract should not be allowed to proceed … We have been led to believe that governmental approval is required, has not been forthcoming to date, but remains 'under consideration'.
The penultimate paragraph of page 2 reads:
If we are unable to resolve this issue within the next few weeks"—
this letter was written on 1 July, two weeks ago—
the chances of a going concern sale will be, in our judgment, much diminished with the regrettable consequences this may entail and I therefore would be grateful if you could give this matter your early attention.
That is the current position, and that is why I have raised the matter the day before we adjourn for the summer recess.
The contribution of the Dunstable truck plant to the economic well-being of Dunstable and Bedfordshire over the years has been enormous. The plant's industrial relations have been superb. Indeed, Dunstable avoided the spectacular industrial relations smash-ups of the 1960s and 1970s because of the imaginative and co-operative spirit between management and trade unions.
I am most grateful to my hon. Friend the Minister for Trade and his civil servants for the helpful and courteous way in which, for a long time, they have listened to me pleading the case for the order for civilian trucks to go ahead. I end as I started, with an appeal for AWD (Bedford) Trucks to be allowed to sell civilian trucks to Libya. Time is running out at a terrifying speed. We must save the Dunstable plant from total collapse. I appeal to the Government for help.

The Minister for Trade (Mr. Richard Needham): The workers of AWD in Dunstable have no more doughty champion than my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel). He has done everything possible to assist in trying to resolve the difficult position that the company is now in, not only because of the unfortunate fact that it has gone into receivership but because of the complexities of the order. My hon. Friend and I discussed the order in detail on 9 July.
I have the utmost sympathy with the predicament in which the company and its employees find themselves. My hon. Friend forcefully spelled out the history of that. I understand and share the distress and uncertainty that the employees must feel about the company's future. As my hon. Friend said, that is doubly distressing given the past of the business, which has acted professionally and innovatively and has upheld the high regard in which the vehicle industry has been held. We are all aware of the quality standards that AWD (Bedford) Trucks has set over the years.
It might help the House and my hon. Friend the Member for Bedfordshire, South-West—I am glad to see my hon. Friend the Member for Luton, North (Mr. Carlisle) present—if I give the background to the difficulties that we must jointly try to overcome. The receivers believe that the sale of AWD as a going concern is largely dependent on the export order which has been the subject of protracted negotiations in the past year. AWD has been at pains to draw those negotiations to the attention of the Government so that we know what is going on.
Exports are actively encouraged by the Government. Indeed, most of my work involves the promotion of exports. Having said that, everyone in government and in

the House will accept that some exports need to be controlled because of the nature of the goods or because of the countries to which they are being exported. The Export of Goods (Control) Order 1989 lists goods which are prohibited for export without an export licence from my Department. The list of goods is extensive and is included in the order for a variety of foreign policy or defence reasons.
I shall not weary the House by giving a long list of the prohibited categories of goods, but, subject to certain conditions, the export of civilian lorries to any destination is not prohibited by the current EGCO which came into effect on 31 December 1991. My officials have made the position clear to the company and have been in regular contract with it since the proposed export of civilian lorries to Libya was raised with the Department.
On 16 January, Mr. Coolican, who is the head of the export control organisation, wrote to the company stating that the export of civilian lorries to Libya does not require an export licence under the EGCO. As with all such inquiries, the letter from Mr. Coolican also warned that the advice was conditional on the lorries not being used in contravention of the article within the EGCO with regard to activities associated with weapons of mass destruction.
The letter also warned that the order is subject to change very quickly. To be able to make such changes is, of course, essential if one is to be able to respond quickly to different and changing threats. All exporters of goods covered by the EGCO are or should be aware of the dynamic way in which the order can be changed. My officials constantly remind companies of that.
For those not usually involved in export controls, I accept that such qualifications may seem rather heavy-handed, but when advice about licensibility is sought, it is important that the Department should make those points plain to alert exporters as regards the way in which the controls operate and the way in which things could change. Mr. Coolican wrote in similar terms to one of the former directors of AWD on 13 August 1991, when the issue of exports to Libya was first raised.
I said that my Department advised that civilian lorries for export to Libya did not require a licence under the EGCO. Unfortunately, as we all know, that is not the end of the matter, and we now come to one of the complex issues I mentioned. The House will be aware that, from time to time, trade sanctions are imposed on various countries. The United Nations sanctions imposed on Libya are not the same as those imposed on Iraq or Serbia and Montenegro. The key difference is that the sanctions imposed against Libya are selective. To put it another way, the United Kingdom does not have a complete trade embargo against Libya.
The House will recall that the United Nations adopted Security Council resolution 748 on 31 March 1992, following Libya's refusal to abide by resolution 731, which called on Libya to, among other things, hand over the two suspects for the Lockerbie atrocity. On 15 April 1992, an Order in Council came into effect which implemented the sanctions adopted by the Security Council under resolution 748.
The two key elements of the sanctions against Libya are, first, an arms embargo and, secondly, an aviation-related embargo. The precise prohibition in United Kingdom law is on the provision of arms and related material of all types, including the sale or transfer


of weapons and ammunitions, military vehicles and equipment. I suggest that the aviation issues are not relevant to this debate in any case.
When my Department was first made aware of AWD's proposals to sell civilian lorries to Libya, it was not clear that some of the items were to be used by the Libyan armed forces. Subsequently, in September 1991, we were advised that some were for use by the Libyan armed forces. It has never been entirely clear, however, precisely who was the intended customer or end user of the lorries.
There have been various indications by the company, as negotiations continued, of changing demands ranging from some to none to all of the lorries being used by the military. The use of lorries by the Libyan military has naturally and understandably caused concern and increased the complexity of the issue, althought it is important to stress, as I have repeatedly done, that these are civilian vehicles—open trucks, trucks with winches, cesspit cleaning vehicles and ambulances—and that none are to any military specification of which we are aware; nor have any military adaptations been requested by the Libyans.
I remind my hon. Friend and the company that the responsibility for deciding whether to apply for an export licence under the Libya Sanctions Order rests with the exporter. A key decision that the company will need to make is whether the export of the lorries requires a licence under that order because the goods are arms and related material. My officials are perfectly prepared to offer help and guidance but, at the end of the day, it is only the exporter who has all the relevant information and only the exporter who therefore knows whether the goods will be caught by a control. That is the normal procedure for all exporters. If the company believed that to be the case, it would need to make an application for a licence which

would be considered in the same way as any other application for a licence under the Libya Sanctions Order. As my hon. Friend knows, no such application has been made.
I should point out at this stage that there is still a considerable amount of trade with Libya which is unaffected by sanctions. In 1991, the United Kingdom's total exports to Libya were £225·7 million. That figure represented approximately 10 per cent. of all Libya's imports. Although it is too early to say, it is expected that only a small proportion of the goods that the United Kingdom trades with Libya are likely to fall within the scope of the current sanctions order. It has been Government policy for some years neither to encourage nor to discourage trade with Libya, but clearly many United Kingdom companies are continuing to do business with Libya in areas unaffected by sanctions.
It is only recently that I became aware that the receivers believe—as my hon. Friend read out from the letter—that Libyan order is crucial to the company continuing as a viable business. That has never been made crystal clear to my Department, but we now understand this to be the case, and we understand it doubly having listened to my hon. Friend's powerful speech.
In conclusion, there is no requirement for an export licence under the EGCO. Whether a licence should be sought under the Libya Sanctions Order is a matter for the company to decide in the light of its own legal advice and after speaking to my Department.
As for Libya, it is impossible to say what will happen in the future. Much will depend on the Libyan Government and, in particular, on Colonel Gaddaffi. I can assure my hon. Friend that I and my Department will continue to do all that we can to assist him to find a way for the company to get its trucks through this especially difficult minefield.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes to Nine o'clock.